Other than reducing the capital required, the reason we purchase LEAPS is to minimize the extrinsic value and theta decay. The green dates Jan 8 are telling us that there is an ex-dividend date prior to the option expiration day and, yes, the return calculations do include the dividend payment along with the option premium. You can easily get at everything right here from this homepage, the site links located at the bottom of each page, the main menu located near the top left corner of each page and the search box located near the top right corner of each page. For more info, just click here. Thenm see which if any of the current year's dogs made the new year's list. Most of the so-called "dogs" aren't high-flying momentum stocks, so you may have to write options longer dated than near-month to get enough premium to make it worthwhile. The portfolio should be adjusted at the beginning of each year to include the 10 highest yielding stocks.
The Dogs. Below is the list of stocks that will make up the Dogs of the Dow theory for Using Options To Trade The Dogs Of The Dow. A different method of trading the Dogs of the Dow would be using options. The typical strategy would be to buy all 10 stocks using 10% of your portfolio for each.
This variation is also called the Dow 5. Almost the same as the Small Dogs of the Dow, except you select the four highest-priced Small Dogs stocks, dropping the fifth. Fundamental Analysis Fundamental Analysis: Qualitative Analysis Stock-Picking Strategies: Value Investing Stock-Picking Strategies: Growth Investing Stock-Picking Strategies: Income Investing Stock-Picking Strategies: Dogs of the Dow Stock-Picking Strategies: Technical Analysis Stock-Picking Strategies: One well-known and successful strategy for cashing in on dividends is the Dogs of the Dow.
Here's what you need to know about them. The following returns were reported by www. Below is the list of stocks that will make up the Dogs of the Dow theory for A different method of trading the Dogs of the Dow would be using options. Rather than do that, you could start selling some cash secured puts on some of the stocks.
If you end up being assigned your purchase price will be even lower than the current stock price which make the effective dividend yield even higher. CVX is a stock that has taken a bit of a beating recently due to falling oil prices. Remember that once you are assigned, you can also start selling covered calls. The January offers 50 cents of time premium while the February offers 78 cents of time premium.
Depending on your transaction costs as well as your outlook for the stock , it may be better to sell the Feb option than the Jan option. But no matter which strike or expiration date you choose, writing covered calls against these high yielding "dogs" will increase their yield and lower your portfolio volatility. The midterm elections carry more weight than any non-presidential voting in recent memory. Click to Enlarge However, it doesn't beat the market every year: Click to Enlarge Better Dogs Combining the Dogs of the Dow strategy with a covered call strategy appeals to income-oriented investors.
Current Dogs of the Dow The top 10 highest-yielding Dow 30 stocks today are:
From through the end of last year, the Dogs have gained an average of % a year while the Dow is up an average of % a year. There's also a popular variation of the strategy called the Small Dogs of the Dow, which involves buying the five lowest-priced Dogs. The Dogs of the Dow is an investing strategy – based on the 30 DJIA components – that was popularized by Michael O’Higgins in his book, “Beating the Dow.” The strategy is simple: After the stock market closes on the last day of the year, select the 10 highest-dividend–yielding DJIA stocks. Better Dogs Combining the Dogs of the Dow strategy with a covered call strategy appeals to income-oriented investors. By selling out-of-the-money call options against their positions, they get extra dividends from these already high-yielding stocks.