04-18-2021, 01:04 PM (This post was last modified: 04-18-2021, 01:06 PM by fenders53.)
(04-18-2021, 12:15 PM)ken-do-nim Wrote: Been doing some research. With regards to the highest quarterly dividend payer, I've come across MVO MV Oil Trust. It pays a whopping 17.25%.
It went Ex-Div April 14th. Relevant end-of-day prices:
April 9th: $5.44
April 12th: $5.58
April 13th: $5.60 (last day to own to qualify for the dividend)
April 14th: $5.14 (... and down)
April 15th: $4.96 (... and more down)
April 16th: $4.87 (... and even more down)
So this confirms what fenders says. The higher the div, the bigger the fall after the dividend date. I'll keep watching to see when it recovers.
Next I'll look at something with a relatively tame dividend, maybe something in the 2-3% range, and see what happens.
That will be the recurring theme if the dividend is the only reason to own the stock or fund. If the annual div is say 8% or more, the QTR div is 2% of course. You'll be lucky if the stock or fund isn't down nearly that much for days or weeks. One factor that helps as people don't pay attention, and but a stock a few days after Ex-div because they weren't aware and think they are getting a stock on sale. I've seen that on this forum.
Take a stock like HD or AAPL and the Ex-div is pretty meaningless after a few hours. If the market is bullish that day it will move up like the Ex-div never even happened.
I will add shares a week or so before Ex-div if I was planning on building the position anyway. When I sell puts, 90% of th time I choose a date that forces the buyer to give me a dividend a week after they exercise me. When selling calls, I avoid the Ex-div enough that they won't be tempted to steal my shares because they have to eat the extrinsic value in my open option premium. It's not a life changing event if I am only dealing with a single contract and 100 shares, but it adds up if I do it 25 times a year. The guy on the other side of the trade might be dealing with 10,000 shares and div matters a lot. If that sounded fancy, trust me it isn't.
Back on topic, there is very little chance you are going to snipe dividends buying and selling funds with 12% yields.
04-21-2021, 07:17 AM (This post was last modified: 04-21-2021, 07:17 AM by ken-do-nim.)
So far what my research tells me is that the extreme version of the Dividend Capture Strategy isn't viable; many stocks take 2 weeks to recover their stock price. However, the strategy that I originally read about, where you make 2 switches a month, seems to be. It is as follows:
1) Pick a monthly payer: ORC, OXLC, PCI, HRZN, etc.
2) Pick 3 quarterly payers; each staggered in separate months. Let's say AT&T for Jan/Apr/Jul/Oct, FMO for Feb/May/Aug/Nov, and NLY for Mar/Jun/Sep/Dec.
3) Each month, pick up the monthly payer, then switch to the quarterly payer at some point, and stay in it past its ex-div; you don't need to return to the monthly payer until it reaches its next ex-div, giving you maximum time to recover the pre-ex-div price.
It may be possible to include a second monthly payer and dance between 3 a month, I'll have to look.
(04-21-2021, 07:17 AM)ken-do-nim Wrote: So far what my research tells me is that the extreme version of the Dividend Capture Strategy isn't viable; many stocks take 2 weeks to recover their stock price. However, the strategy that I originally read about, where you make 2 switches a month, seems to be. It is as follows:
1) Pick a monthly payer: ORC, OXLC, PCI, HRZN, etc.
2) Pick 3 quarterly payers; each staggered in separate months. Let's say AT&T for Jan/Apr/Jul/Oct, FMO for Feb/May/Aug/Nov, and NLY for Mar/Jun/Sep/Dec.
3) Each month, pick up the monthly payer, then switch to the quarterly payer at some point, and stay in it past its ex-div; you don't need to return to the monthly payer until it reaches its next ex-div, giving you maximum time to recover the pre-ex-div price.
It may be possible to include a second monthly payer and dance between 3 a month, I'll have to look.
It's going to work like my method. Trade might be there several months in a row, then it may not be for awhile. What will make a strategy like this fail is if you buy random stocks or funds you haven't properly researched because an ex-dividend date happens to work. Long way of saying don't force trades and get yourself trapped overweight in crap you don't really want to own.
A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
(04-28-2021, 07:02 AM)NilesMike Wrote: A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
It often works that way. At times it seems the market has no problem paying a buck for a sixty cent dividend.
(04-28-2021, 07:02 AM)NilesMike Wrote: A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
Wow, neat!
****
I haven't started this strategy yet; I still need to work out a schedule with the right stocks that works. In the meantime, I'm diversifying out my triple-leveraged funds in the ROTH to great success so far. It's not clear that the dividend capture strategy tops buying & holding triples at this time.
(04-28-2021, 07:02 AM)NilesMike Wrote: A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
Update/refinement;
1)I have added a 200SMA to my chart and only take the trade is above SMA
2) If ex-dividend day closes above the prior day's high, enter long the next day and hold for 2X dividend payout.
Nearly 100% success rate on this strat with longest holding time about 10 days.
(RE: MVO example referenced above, wait for a close above 4/13 High (5.70) on 5/14, enter next open and by end of week, you had nearly 3X dividend payout.)
Looking to see if I can lever it up a bit more with options, but I'm afraid it will limit choice of tickers because of liquidity constraints.
(04-28-2021, 07:02 AM)NilesMike Wrote: A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
Update/refinement;
1)I have added a 200SMA to my chart and only take the trade is above SMA
2) If ex-dividend day closes above the prior day's high, enter long the next day and hold for 2X dividend payout.
Nearly 100% success rate on this strat with longest holding time about 10 days.
(RE: MVO example referenced above, wait for a close above 4/13 High (5.70) on 5/14, enter next open and by end of week, you had nearly 3X dividend payout.)
Looking to see if I can lever it up a bit more with options, but I'm afraid it will limit choice of tickers because of liquidity constraints.
Just to be clear you are playing a few days of momentum if the stock completely recovers on ex-Div day?
(04-28-2021, 07:02 AM)NilesMike Wrote: A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
Update/refinement;
1)I have added a 200SMA to my chart and only take the trade is above SMA
2) If ex-dividend day closes above the prior day's high, enter long the next day and hold for 2X dividend payout.
Nearly 100% success rate on this strat with longest holding time about 10 days.
(RE: MVO example referenced above, wait for a close above 4/13 High (5.70) on 5/14, enter next open and by end of week, you had nearly 3X dividend payout.)
Looking to see if I can lever it up a bit more with options, but I'm afraid it will limit choice of tickers because of liquidity constraints.
Just to be clear you are playing a few days of momentum if the stock completely recovers on ex-Div day?
Any time post ex div date. If it recovers ON ex div date, the move is bigger.
(04-28-2021, 07:02 AM)NilesMike Wrote: A little ,more laborious but works better IMO this way. Look at ex div day on stock of your choice, stock will usually fall. Wait for a close above the high day before ex div date. Buy stock, hold for a week, usually better pop than than what the dividend pays.
It is easy to forget watching and get distracted, don't ask how I know-LOL
Update/refinement;
1)I have added a 200SMA to my chart and only take the trade is above SMA
2) If ex-dividend day closes above the prior day's high, enter long the next day and hold for 2X dividend payout.
Nearly 100% success rate on this strat with longest holding time about 10 days.
(RE: MVO example referenced above, wait for a close above 4/13 High (5.70) on 5/14, enter next open and by end of week, you had nearly 3X dividend payout.)
Looking to see if I can lever it up a bit more with options, but I'm afraid it will limit choice of tickers because of liquidity constraints.
Just to be clear you are playing a few days of momentum if the stock completely recovers on ex-Div day?
Any time post ex div date. If it recovers ON ex div date, the move is bigger.
Interesting. Not a trend I would have expected. Half my stocks are often slugs for a few weeks after ex-div. I guess that's why you screen for exceptions because there definitely are exceptions.
