Meet Gary, a user name from Seeking Alpha who is trying to learn about the markets in an interesting way. Gary has not set out to learn about the markets, but rather he has decided to share his knowledge and take the time to correct errors of others. The time and effort would appear to be highly commendable, There is only one small problem. Gary is almost always wrong in his understanding and really doesn't know very much. Normally not knowing very much about the markets, and especially the mechanics of the market is easily overcome by the large volumes of information available.
The other side of anyone with an internet connection posting information including attempts to correct others is that they may be totally wrong. It's a small price to pay for having the world of information at your fingertips but it does demonstrate the internet is not free. One must sift through information and confirm and reconfirm costing time when careless individuals are not careful with what they post as "facts"
Join me in my adventure with "Gary" as he follows along while I write articles on Seeking Alpha. Gary will point out "facts" that are incorrect, claim I wrote things that I did not (which is really bizarre considering some claims involve the same article the comment is on). What makes my interaction with Gary worth posting is that he makes so many errors that it becomes a good platform of learning for people starting out with options, dividends and the markets in general.
Since the dialog with Gary has been ongoing at the time of starting this thread and some comments are so bad that they have been removed by seeking alpha I have had to search to find comments removed by third parties. I know of one removed because Gary advised me of it but there could be more (I wasn't keeping track). I will attempt to bring the entire dialog here and starting with new comments by Gary, I will respond here as well.
From the article http://seekingalpha.com/article/290232-using-options-to-capture-dividends-ex-dividend-date-september-8-2011
Gary:
The other major risk not highlighted is the fact that the stock goes down when it goes ex-d; and that is almost always the case in high yield stocks. So unwinding the position shortly after ex-d often comes at a loss.
I know, I've tried it, seen it and no longer do it.
*******************
I did not reply to his comment. I may have missed it or was tired and or didn't care enough to respond. I don't recall, but since I actually make the trades I know they can be done. As a side note, what Gary fails to point out is he believes money can be made by taking the opposite trade (of course he know it though but that is what he is saying. Its a zero sum game and if there is a for sure loser, it means there is also a for sure winner)
From the article http://seekingalpha.com/article/290326-using-options-to-capture-dividends-ex-dividend-sept-1-2011
Gary's comment:
Robert,
This is the 4th article on "buying shares, selling calls and unwinding the position" that you've not disclosed the following:
High yield stocks generally drop by their "lost" dividend value on ex-d day.
So unwinding a position that you prescribe results in a loss.
Possibly less of a loss that the value of the dividend you've gained, but nevertheless a loss. You suggest the buy-sell can be done at a profit; not so.
But tell me I'm not wrong.
Thanks, Gary
PS now stop repeating a post that is essentially wrong, or misleading at best
*********************************
My Reply:
Hello Gary,
Thanks for reading my article (all four that you read) and taking the time to comment and ask your question. A lot of people don't understand the mechanics of the markets and how it all comes together. I look at that as a good thing in terms of my trading. If you had done your homework before stating I am posting wrong or misleading information I don't believe you would have. I have a lot of articles here and a journal going back years, and I have a chat room that I have hosted for years with real time results being posted.
I believe it would have been helpful if you had taken the time to demonstrate how my math is wrong, or how the loss you claim would happen actually plays out. This is especially so since right above your comment is an example that you could have used to show how the trade would be a loss.
I will use the above DSW as an example since it's right here and I am not cherry picking. It is one that I talked about in my chat room today and explained it to many people so I can reply right off the top of my head. I also put the trade on today so its a real life fresh example, not just hope and fantasy.
I believe it qualifies as a good example of what you mean by a high yield stock. The next dividend is $2.15 and the price I paid for the stock is 47.08. I covered the stock with September $45 calls for $3.10 or $1.02 over the intrinsic value.
DSW goes ex-dividend on September 16th. This is the same day the option stops trading and the OCC requires exercises by 5. My technical break even is about 41.90 but lets call it 42 to round it off. If DSW is above $42 on September 16th I will make money on this trade, end of story.
If DSW is much above $45 two days before ex-dividend with little or no time premium (or possibly negative if calculated off the bid), I can expect to get exercised at $45 and make a gain of about $1. If its less than 45 but higher than 42, I get to keep the difference between the stock price and 42. If the stock falls below 42, then yes it gets chalked up as a losing trade. There is one other possibility that happens from time to time. The stock could move higher (very possible with this one) by a lot and as we get closer to expiration day, the option may have a bid at or near zero time premium. At that point I would put in a floating bid to stay at the NBBO and hopefully get closed out that way for maybe 0.90 or higher gain.
In a way you are correct that if the stock gets exercised away from me that I will lose money on the stock (47.08 vs the 45 strike price) but the point becomes moot pretty fast when I am holding on to another dollar or more out of the deal that I did not have before.
Gary, I welcome you to point out anything (with the numbers to back it up) that is wrong or misleading with this one or any of the others I posted.
Best,
Robert
******************************
Gary's rebuttal:
Robert,
I understand your points and your math, but I disagree that a trader can get the prices you're submitting.
In your DSW example you cannot today get the net price you paid ($43.98, it's currently about $44.29. Maybe you made that trade some time ago, maybe shortly after the div declare date (Aug 10 or 11, I believe), but it can't be had today. At any rate your DSW is a special case.
In terms of regular examples, I checked your 2 top examples CTL and WM since they both went ex-d today.
I noted yesterday's closing price of the share and the bid price our your suggested covered call and matched it to today's
In both examples, the share price loss is worse that the dividend gain, including the netting of the premium on the sell and buyback of the covered option. A loss by any other name.
If in fact, with DSW, CTL or WM you made your original buy/write move some time ago when premiums were higher than they are now, you are really advocating a buy and hold strategy; not a quick flip.
To summarize, I don't quibble with your math or your stated logic, but I do disagree that you can get the premiums that you advocate, on both the sell and buyback of the covered options.
I know because I tried it a few times, and have the red ink to prove it.
As you say, there is not such thing as a free lunch.
********************
My Reply back:
Hello Gary,
Thank you for your follow up comment.
As stated in my comment, I put on the trade the same day I made the comment so I know for a fact it could be done as I did it. It was not a fluke either as I thought about adding to it later in the day as there were several times I could put the trade on.
I took a look at the option sales for CTL on the 31st, and the lowest price paid was $1.60. Based on the stock price and the prices the options traded at it would appear that if you wrote the option you would have been called resulting in a gain of 0.35.
What one investor considers a quick flip and another a buy and hold is subjective, but I never used either of the terms in any of my articles.
I also never suggested covering on the ex-dividend date and in fact I put in what parameters I do cover a call at.
While I believe it would be likely that the gain was already made, even if the call was not exercised, CTL is still a winning trade. If the stock was bought at the open for 35.30 and a call written at 2.02, there is a dividend of 0.74 gained and the current position is long the stock covered by the $34 strike option that is decaying fast. At the current price, the option will decay enough to be out of the trade by this time next week. Earlier if the stock moves higher.
So even your example is a winner. I am sorry you have red ink, and it would appear based on your comments that you have been too limiting in your approach. Perhaps you have a broker that has commissions, and or trading structure that will make this not work. I don't know. I do know I have made and do make my living from trading so what I say is not theory, but actual practice.
What I do in all my trading including this method takes time, effort, and understanding. Likely more than most are willing to put in or it wouldn't work for me anymore.
Best to you and I do hope that you are able to find something else that will work for you.
Best,
Robert
****************************
Gary's Reply:
Robert,
Thanks for the response, at least you're not afraid to argue your position despite being wrong.
As I mentioned I believe the DSW case is unique, because it involves a special $2 div. But nevertheless, I stand by my assertion that a trader could not have gotten the net price you did (or claim).
But having said that, things change (isn't the market just like that?), and I hope you did take advantage of the dip in DSW and buy some more, and sell more Sept 45 calls, because your net price is even lower.
But enough of your special case and let's talk about the ones you recommended to readers - CTL
You wrote the article late Aug 29, and recommended a buy/write strategy with a post ex-d unwind (I know, not necessarily the following day).
In the case of CTL, you suggested selling a call 35 cts over IV. Even if that was doable. I told you the stock (of a hi yield company) would fall by at least the value of the div, but the call would not fall by the same value. No, you're correct, I didn't exactly say that. I said you wouldn't get a net of stock sale and option buy-back that would make the trade positive.
What happened with CTL ?
The stock declined (as predicted), and quite so, I might add, but I didn't see that coming. So, even if the option went to zero, the trader would have a terrible loss, if he chose to unwind. But as (or was it murphy) said a loss is only a loss, if you take it. So if said trader decided to hang on, he might have regained he lost value; but one wonders why take the paper loss in the first place, just to gain a dividend ?
That's the case with CTL; how about your second choice WM ?
It fell 96cts on ex-d day, all for a 36ct diviidend; worth the buy/write? I think not. But that's my point.
The facts and figures of your suggestions are there for readers to see. And, it begs the question . . .
If you make you living trading, and you're recommending these flawed strategies, how come you don't follow your own advice?
Your disclosure says . . . you don't.
So, if it's not good enough for you, why should it be right for a reader ?
Gary
*********************
My Reply:
Hello Gary,
There is not a lot of reason for me to put in the time to walk you though it. You are the type of person who thinks they know a lot more than they really do. A simple check of the time and sales of the options would have demonstrated that I made the trade the way I said (or at a minimum showed it could have been done). You didn't check it because you don't know enough to check it. I am more than happy to help those that do not understand a concept, and I make myself available everyday in a free chat room. But i have little time for those that are ignorant and arrogant at the same time.
I don't really enjoy having my honor questioned, and your last comment is the second time you have done so.
So allow me to wish you and yours a very enjoyable labor day weekend as well as the best of luck with your investing
Robert
************
By the last post my frustration is starting to show. It really should not be though. Gary is probably not that different than many retail traders who have not kept up with the changing markets. As someone who has been trading since the mid 80's I know there are trades that a retail trader would not be able to make when I started that are easily made now. I also know that different brokers offer better trading than others. If Gary is with a large old shoe broker that charges $25 a trade plus is selling order flow, there is no way he can make the same trades as I can. He may simply be under the impression that the deal he has is as good as it gets. So his statements while wrong, may reflect the reality from his situation. This brings up a lesson in of itself. Understanding the markets and how your broker impacts your trading either positively or negatively is as important as understanding when to buy and when to sell.
From the article http://seekingalpha.com/article/292870-profit-from-the-bank-of-nova-scotia-with-options-and-dividends
Looking at the comments, it appears that either part of or complete comments have been removed made by Gary. I tried to find missing comments on Google cache but did not find any. Here is what I have then.
Gary:
To add to VL's comment re forex; the investor should also be aware of foreign withholding tax (15% I believe), for Canadian dividends.
In an after tax account you'd get credit from the IRS; but in a non-taxable account IRA you will not.
Additionally, as I've mentioned in other posts, in the case of hi-yield stocks, the share price will likely decline on ex-d day (all things in the market being equal), to reflect the loss of dividend value no longer inbedded in the share value.
The option value does not similarly decline, making the unwinding (sell share and buy-back option) difficult to exercise at a net price greater ($.20 in this example) than when setting up the position.
*************************
Gary,
Thank you for reading my articles, but your comments continue to show you lack of understanding. I strongly urge you to do more reading and less statement of facts as some readers may become victim of your false inforamation.
For US traders, there is no foreign tax issue with NYSE stocks and BNS trades on NYSE.
"In an after tax account you'd get credit from the IRS; but in a non-taxable account IRA you will not." -Are you a qualified tax professional, that can provide investment tax advise to others? If so declare it or if you do it again I will be forced to advise SA in an effort to protect readers of my articles.
Sorry, once again you are wrong, but time value of options decline as they approach expiration date. That is a fact that even basic level option traders understand.
Seriously and respectfully, stop posting incorrect information on my articles.
Robert
***************************
Gary:
Robert,
Your comment:
"For US traders, there is no foreign tax issue with NYSE stocks and BNS trades on NYSE"
The only correct part of that statement is that BNS is traded on the NYSE.
The dividends originate from a Cdn company and they are required by federal law to withhold taxes at source before sending funds outside the country.
But as I stated in my supplementary comment, the trader gets a tax credit from the IRS (except in an IRA).
How do I know? Because I live it. I own Canadian banks.
****************************
Gary:
Gary,
You are no longer allowed to post comments on my articles without sources. You have consistently provided wrong information, you never provide sources, and as I stated before you think you know a lot more than you actually do.
I am also reporting you as I said I would. You have not declared yourself a tax professional and yet you continue to state what appears to be erroneous tax information. For everyone that has followed this article I would like to direct you to IRS publication http://www.irs.gov/pub/irs-wd... and also to consult with a real tax advisor.
Exchange rate effects on stock are reflected in the beta of the stock. The implied volatility of the option is reflected from the beta in the stock. As a result, expected variances are priced into the options, just like interest rates are. To not have the beta of the stock priced into the options would require the options to be mis-priced, and create opportunity.
If someone believes that a trade I am making will be unprofitable they can take the other side and make money if they are correct. You have not suggested taking the other side of the trade because either you know your wrong or you don't know enough to know it's a zero sum game.
Remember Gary, no source= no comment for you. You have simply crossed the line to many times.
Robert
************************
Gary:
Robert,
You simply "don't know what you don't know"
You don't know the tax treatment of foreign dividends, and you don't know the forex impact on foreign stocks traded in the US.
To simplistcally tell your readers that "it's all OK because the stock is traded on the NYSE and therefore (implied) sheilded from those issues" is so naive, it's laughable.
You keep asking me for source, and I keep telling you - experience
I have lived and experienced the issues I've highlighted. I am the source.
You need to do your own due diligence and stop asking me to do it for you; or accept my experience as fact.
You've not been able to prove me wrong so far. Your retorts are mere bluster.
As I started off - you don't know what you don't know.
As for banning me - if you personally can do it, I guess it'll get done. But SA won't, because when they read your simplistic articles and my rebuttals, we both know what their decision will be.
BTW - if you really want to do some serious DD about tax treatment and properly advise your readers, rather than post a US IRS site, you should be posting the tax site from the home country (that would be Canada in this case) where the tax is being withheld to understand their treatment of flowing dividend funds offshore (the 15% withholding, I speak of).
You won't find it on a US IRS site, because they don't know if and how much a given foreign state will withhold.
As I said earlier, I'm not going to do your DD for you, but that same IRS site you posted will have somewhere in it, the statement that the IRS affords tax credits to taxpayers that pay withholding taxes to foreign nations.
In case you haven't figured it out yet Robert, I'm from Canada, living in the US for 15 years, so I know of what I speak.
As I've posted several times already; my source is my experience
So stop trying to deflect from the real issue at hand, by asking me to post or quote source; and read the facts for what they are - the truth
Have a grand day, Robert
**************************
My reply:
Ok Gary,
We are all clear now.
Your source is your experience. No reason for anyone to give any consideration to the IRS publication or the fact that I actually traded DSW and the tape shows the same.
Readers can compare the exchange time and sales records and the IRS publications against your "experience" and decide which source is the more credible.
********************************
Gary's reply
Robert,
At least I have experience. Your disclosure indicates you've not once invoked the buy shares- sell call options for regular hi-yield dividends for which you've posted, except for the very unique case of DSW which you didn’t tell us about, until posting it in a rebuttal to my exposures of your inaccuracies. You and I both know that to be true, as do readers, of which there don’t seem to be too many, huh ?
Kudos for picking DSW, BTW. For all the other many hi-yield regular opportunities you've posted, you've shied away from by your own admission, so you've no experience in that field.
With regards to the tax and forex, you know nothing and post yourself deeper into inaccuracies.
Did you even read the IRS site you posted ?
And even if you did, did you not understand it ?
It's about the Canadian tax treatment of income distribution of royalty trust units engaged in oil and gas exploration, not dividends; such as those from our favorite Canadian Bank, Nova Scotia.
They're different issues Robert.
The letter is about:
Pengrowth (symbol PGH)
Penn West Energy (PWE)
Check them out.
Oh, and I have experience with them as well; so I knew exactly what the letter was referring to when I read terms like: royalty trust and income distribution.
It's about gas and oil exploration income distribution. Your letter is not about dividends from Canadian banks.
My statement on the tax treatment of dividends stands.
And you want chastise me about publishing inaccurate facts ?
Here you go Robert
02/28/2011 BMO BANK MONTREAL QUEBEC F
type: QUALIFIED DIV $503.13
02/28/2011 BMO BANK MONTREAL QUEBEC F
type: FOREIGN TAX PAID -$75.47
Cut and paste from my personal account. Foreign tax paid to Canada for Bank of Montreal dividends. It's already been converted to US funds, so there is a forex impact.
But as I accurately posted, I'll get a tax credit from the IRS for the same dollar amount.
*************************************
My response:
ello Gary,
I believe the best course of action is to consult with a tax advisor. If you are correct about the tax treatment I have no problem saying so.
As far as forex impact on options are concerned. IF the expected impact of forex was NOT priced into options, it would mean the options would be priced to cheap. This would cause people to buy the options because of the profit potential, of course this in turn would cause the options to increase in price until there is an equilibrium. So there is no free lunch. Forex impacts on stocks that have a large forex component in valuation will have it priced into both the stock and the options that get traded.
I hope that makes sense.
When the DSW trade is finished which is expected either tomorrow or on Friday i will find another dividend paying stock to do the same thing with. This is something I do over and over with and all the articles are viable candidates. There is really nothing all that special about one over the other.
I don't write articles for the sake of writing articles. They are based on my research to see what I want to put my money in and that is what gets submitted to SA.
*********************************
From the SA Article[url]http://seekingalpha.com/article/294166-sell-netflix-put-options-for-a-premium[/url]
Gary's comment:
Robert,
You have not mentioned
a) the downside risk of selling naked puts; as well as
b) the amount of margin required to sell a naked put.
Let's discuss each item.
Downside risk:
Should the stock decline to less than your net cost, the strike price minus the premium gained ($140-7.65=$132.35) and many would suggest that's a good possibility; the investor is looking at a loss. It could be substantial if the stock gets to the low 100's
Experienced option traders are well aware of this downside risk, but it should be pointed out nevertheless.
You could have recommended "insurance" - buying a put below your $140 strike; say an Oct 120p for $2.79. But that means
a) your $7.65 premium is reduced to $4.86, and
b) you're still exposed for the gap $140-$120
Secondly, margin requirements:
Every contract that gets you $765, requires the investor to put up approx $3200 in funds.
Bottom line; selling naked puts is extremely risky, especially for volatile stocks like NFLX.
That should be pointed out.
*******************************
My Reply and once again another attempt by me to politely correct his errors (granted with enough sarcasm to send the point home of how useless his disclosure comment is).
Hello Gary,
Thanks for reading my article. I am pleased to know that I can count on at least one Canadian to keep track of me.
You may be interested to know that my "impossible" DSW trade ended today successfully for an annualized compounded rate of return in the triple digits. Not bad for a kid in the northwoods of Wisconsin...
You are somewhat correct, I did not explicitly mention the downside of selling naked puts. Considering the mountain of forms that need to be signed and the pile of disclosures that option traders state they understand I believe it would be a fair statement to say the risks are or should be understood. At the same time there is no reason for me not to add to the countless warnings. So allow me to do it here.
Trading anything involves risk and I believe anyone trading in options should have a complete understanding of the risks and should consult with their financial advisor before making any trades. At the same time not trading involves risk so regardless of what you do risk will not be eliminated. Even US debt has been downgraded, so there really is no riskless move.
Ok, risk has been mentioned and I hope it meets your satisfaction.
You are correct that I did not mention the amount of margin required to sell a naked put so allow me to do so here. Selling an out of the money put generally requires less margin than buying a like amount of stock. There is not much more I can add to that because different brokers have different margin requirements depending on the customer, the regulation they fall under, and the stock that the option is written for.
You brought up two very good points and I think it's fair to say that we both agree that selling naked puts is less risky than buying the stock and involves less capital to be cashed covered.
You could have recommended "insurance" ... Yes I could have but I didn't and the only thing I pointed out is "For those that want to buy Netflix or are willing to buy Netflix under $135, selling puts offers a lower risk method of entry and the price does not need to go up to make money."
I sell options because they have less risk than taking a position in the underlying. I am unsure what you consider trading the underlying if a safer method is extremely risky but you are free to decide what to label any given risk as you see fit.
Despite your well intended and mostly wise words of caution, as we both agree risk should be carefully assessed before making any financial decision, you do have an error in your comment.
Selling naked puts (which I never suggested but we can go with that) is no more risky with "volatile" stocks than it is with "stable" stocks all else being equal. I don't believe you're intentionally trying to give out misinformation. I would suggest reading up on how options are priced and valued. If you are still having trouble, post a question on paid2trade.com forum and I will be happy to go into detail (applies to anyone really). The forum just opened a few days ago and all are welcome.
Lastly, Now that DSW is closed out I will be rolling over and putting on a new position for dividend capture. Anyone is free to join me in the chat I moderate and I will be calling out (like I have for years) what I am looking at in advance of the trade and in real time the actual trade.
Best
Robert
Gary's reply (this was removed for violations (i believe) by SA per my (and maybe others ) reporting of abuse. There may be others as I have not kept track or tried to find others.
Thanks for acknowledging my post, Robert, and admitting your shortcomings regarding recommending a short option sell, without disclosing downside risks; or the margin requirements.
Regarding your comment "Selling naked puts (which I never suggested but we can go with that) is no more risky with "volatile" stocks than it is with "stable" stocks all else being equal"
. . . you are again totally mistaken. That is exactly what you recommended - selling a naked put against NFLX.
And "stable" ? Do you even proof-read your own stuff ?
NFLX is a stable stock in your mind ?
Your remark . . . . "I would suggest reading up on how options are priced and valued" is certainly laughable
'tis not I, Robert, that needs to better understand option trading but rather, you.
And I'll give you another example -
Everytime you recommend selling an option; whether it's your covered call strategy, prior to d-date, or your current, sell a naked put; you quote the (higher) ask price.
You and I both know you can't get the ask when you're selling, you have to settle for the bid.
So please stop misinforming your readers (and suggesting I get more info, that's so juvenile) . . . you need to make the right call.
I'm getting tired of your erroneous recommendations and then your trying to deflect my correcting comments as "you need to read more".
As I told you before, Robert . . . you don't know, what you don't know.
And please, do follow through with your earlier threat to have me banned. I dare say, the editors will read your juvenile (and erroneous) posts as well as my responses and ban you. LOL !
You are misleading readers
My response (clearly showing frustration with Gary's non stop badgering. Now I am turning it around and using the dialog as more of a question and answer to help others who may also have wrong information)
*********** WARNING TO ALL READERS ***********
The comments made by user Gary Bushwacher are erroneous and misinformed. The user has been advised several times by the author of his lack of knowledge on the subject and continues to post comments as what appears to be a form of harassment.
*********IT IS THE AUTHORS OPINION THAT NONE OF THE INFORMATION IN THE COMMENT BY GARY SHOULD BE CONSIDERED CORRECT **********************
Seriously, I gave you the benefit of simply being an idiot and you think you know more than you do. But you have proven that not only do you not know what you are talking about, but you are arrogant. I tried the nice approach with you TWICE, and I warned you about making statements without sources because you have posted erroneous information on every or almost every comment.
- I never suggested to anyone that they should sell naked puts
- I almost always enter into an option trade by selling at or near the offer and always buy at or near the bid. With the majority of the time selling at the ask and buying at the bid.
- You have no clue how options are priced and if you did you would understand that if an option price did not reflect the risk people would buy the options (causing the price to immediate rise to equilibrium). An option trade is NOT more risky as a result of a higher underlying beta. Its a zero sum game. That means if there is a price mismatch i.e. the price is too high or low, someone will arb it.
- You can tell me what ever you like but it doesn't change the fact that your information is incorrect.
The good news for you Gary is that at least you're errors are being pointed out so you have a chance to learn. More importantly to me, is that other readers hopefully are learning.
** I can't say I am very proud of this last post/response. maybe I should be nicer and try to help him more, but I reached a point along with my frustration, that I was worried some readers may give him credibility.
************
Gary's response to another comment that was a reply to a different user
DSW did not gain $1.32 on the ex-d date; it lost 83cts from the previous actual close.
What you're measuring it against is the adjusted close with the $2.15 taken out. That's how many sites portray it; mine (yahoo) does. To validate - have a look at a five or three day chart. You'll see what I mean.
I surprised Robert didn't point that out - he who strives for accuracy of facts. Well maybe I'm not, he tends to construe in his favor; so he let that pass.
My reply to Gary
Gary,
I HIGHLY recommend that you write an article about options.
You will find out quickly how much you know....
Add things like "you can only sell at the bid and buy at the offer"... See how many comments you get...
Gary's reply:
Robert, let me too try your heavy handed style
*********** WARNING TO ALL READERS ***********
The author, Robert Weinstein deletes posts that he deems exposes his errors, or his less than full disclosure of the risks of his strategies.
I have pointed out several mistakes on his part, both here and on other posts. On that other article he posted links to wrong IRS documents regarding the treatment of foreign dividends (Canadian Banks) . He confused income trust disbursements with bank dividends; I set him straight.
I have repeatedly pointed out failings or "stretches in doability" on his part and he says for example that I said "you can ONLY sell on the ask". His stretch, and incorrect statement, because I said it's unlikely, not impossible to get the ask. You could check for yourself but he deleted the actual post, so you can't judge for yourself. He paints a rosey picture without telling you the risks or the likely doability of the stretch prices he claims. I didn't say impossible, I said unlikely.
Why not refute with facts rather than delete bad news ?
He also said he didn't recommend selling a naked put.
I'm sorry, but that is exactly what this original article is about. Please explain how that cannot be the takeaway from this article.
I only added to the article by pointing out the downside risks (and margin requirements) and decides I'm inaccurate. But he acknowledges my points in a post above, that he hasn't got around to deleting. But I'm always wrong, huh ?
Robert, you can go ahead and delete this if you wish. But I'll just repost it.
You haven't proven me wrong, you've only proven yourself intolerant of dissenting opinions to your own. I wouldn't be so persistent if you'd only say I disagree and move on, but if you insist on calling me out as wrong, then I have to point out your shortcomings.
Why not debate the points on their merit with substantiated correct links, rather than just say . . .
**** WARNING HE'S WRONG, I'M GOING TO DELETE HIS POSTS *****
From another users comment:
Kudos on your "impossible" DSW trade. I was unfortunately unable to execute the trade with all the volatility in the market, I got "cold feet". Amazingly enough, DSW GAINED some $1.32 on the EX-D date, so it was indeed a bigtime winner. If I recall and if I had had the nerve to pull the tirgger, I could have bought DSW early in the week in the $43 range, written a call at some 5 to 6%, reaped a 5 percent div, and shown a total return somewhere between 14 and 16 percent in less than a week. Nice call! That is my kind of trade. Just wanted to let you know some of us are liking what you do. Its very easy to sit back and shoot holes in a strategy theoretically, its quite another thing to put out specifics the way you did (and do). Keep up the good work.
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