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Posted by Martin May 28, 2015

If you sell a put against dividend stock, do you pay a dividend?

Recently, I got this question from a subscriber of mine.

“Do you have to pay a dividend if you sell a put option against the dividend paying stock?”

It is a good question and short answer to that is no, you do not pay the dividend.

You are obliged to pay the dividend (its substitution) only if you sell the stock itself short. A put option is a completely different instrument, which although corresponding to the underlying symbol doesn’t carry any rights or obligations of a stock. Thus only a stock will give you the right to receive the dividend if the company decided to pay one.

With options you only have the right or obligation to either sell or buy the underlying stock at expiration and at a given price.

And of course, it is the same with call option. When you buy a call option, you will not receive the dividend either.

Happy trading and if you have a question, don’t hesitate to ask!

Posted by Martin November 26, 2014

Happy Thanksgiving Day

Happy Thanksgiving Day

Dear readers, subscribers, traders, and investors,

It has been a rough year and I believe for many of you a profitable year. The end of this year wasn’t as good to me as I would wish, yet I am grateful for it as I learned a lot from my mistakes. I hope I would be able to use this knowledge and be a better option trader.

I also hope that my blog and my newsletters about options trading would be also valuable for you, my readers and traders and it will bring you good trading and investing ideas.

I am also thankful for you my readers for visiting my blog and being subscribers to my newsletter.

Thank you!

I wish you successful trading, investing, and fulfilling your goals in the next season.

Martin

Posted by Martin August 23, 2014

Back alive and Liebster Award nomination

Liebster AwardI am finally back home from a hospital. Still in pain and on drugs but getting alive again. Although, sometimes I am thinking I would like to stay back in the hospital doing nothing and enjoying it.

A week ago I broke my ankle so bad that I needed a surgery and now I have 6 screws in it. I think, now when flying somewhere I will always sound the alarm at those TSA frames.

Being in the hospital had a few positive outcomes, besides fixing my ankle. I could watch TV almost the whole day, so I was watching CNBC and I was in awe what nonsense they speak about in there. I was shocked that they had absolutely no clue why markets where rising or falling or what was going on.

Not that I had any clue myself, but I do not speak about it publicly trying to explain anybody, why the market, or stock, is up or down. And then it came to recommendations of “what you should do with your money in your 401k account in this market.”

I am truly sorry for those people who invest upon advice from CNBC.

The second good thing was that I was watching my investments over the mobile applications so I learned using them. Now I no longer need a laptop with me. I can make my trades using my phone or Kindle.

Liebster Award

In the meantime, I was also nominated to a Liebster Award by Scott from Two investing blog.

What is Liebster Award? Just in case you haven’t heard about it, a Liebster Award is an online award given by bloggers to other bloggers so you can discover and learn about other blogs out there. A blogger who nominates you gives you a set of questions. You answer the questions and then select five new bloggers who will follow. You ask them another set of five questions and they should answer them. It is like a chain letter you may have heard about.

So, thank you Scott for nominating my blog and here are the answers to your questions:

1) Favorite investment book? Non-investment book?

I have read many investment books so it is hard to choose which one is the winner. It also depends on my investment strategy. So as a dividend investor I would select “The Single Best Investment” by Lowell Miller. If you want to learn about dividend growth strategy and how to implement it to create a great portfolio full of high quality dividend growth stocks which will lead to ever growing sustainable and secure income, this is the right book for you.

As an option trader I would recommend “Generate Thousands in Cash on your Stocks Before Buying or Selling Them” by Samir Elias. If you ever wondered how you can utilize options to boost your dividend income on stocks you own, or even plan on buying this is a book to you. The principle of the book is basically to use options to generate enough cash to buy a stock of your interest using other peoples money and once you acquire the stock, use options to generate more income on that stock.

A simplified version of that book describing details and procedures of put selling strategy is a book by Jerry Lee “Selling Put Options My Way

I told you it wouldn’t be easy to select the best investment book.

Since lately I only read technical, history, or investment books it is hard to say which of non-investment books to choose. I would choose books by Jules Verne a 19 century author who wrote sci-fi books such as “Twenty Thousand Leagues under the Sea, The Mysterious Island, Around the World in 80 Days, Journey to the Center of the Earth,” and many others.

2) If you had all the free time in the world, what would you be doing?

Traveling. I hope that my investments and options trading get me into a situation that I will be able to quit my job, buy a double decked coach and a sailing boat, and I would be able to travel around the world. With my family. And if that ever happen, I will write about it in my blog, so you will find out.

3) Why did you start your investing blog?

As many of the bloggers in the investing niche, I started my blog as a record of my trading and investing endeavor and to entertain and educate. I wanted to share my investment success with others and show how great and skilled investor I was. Well, it showed up as an ambitious dream. Very little I knew how to write to express myself so someone would care reading it. Also this blog opened my eyes as it became obvious that I was not a brilliant investor or trader at all.

It actually showed up that I was a loser. I was a sucker losing money but had a high thinking about myself. The blog helped me a lot to find out who I was and what I wanted.

Now I would like to pay it back and help all those, who look for being successful in trading or investing.

4) What was your best and worst investment?

My best investment was an option trade against GME stock when I sold puts and made full 100% profit overnight as the option expired the next day. I made 3% gain overnight. I would already be retired if all my trades would look like that one. You can read a brief report about that trade here. Please read it and let me know what you think.

My worst investment ever happened at the beginning of my investment career when I was sold to trading commodities. As my broker made killing on fees and commissions, I lost all my account. You can read the story in my post “The curious history of a sucker

5) Favorite job you’ve had so far?

Actually I haven’t held any other job than engineering so I can only choose between mechanical engineer and a professional full time trader.

I like mechanical engineering a lot, but my pick would definitely be a full time trader. I am not there yet, but I hope that in the next five years (if not earlier) I will become a full time trader.

Scott, thank you for nominating me and describing my blog in a nice manner. I appreciate it.

My Liebster Award Nominees

And now it is time to pick my Liebster Award nominees and ask them my five questions.

My fist nominee is Michael from Dividenden-Sammler (The dividend collector). Michael lives in Germany and he is a dividend investor. Investing in Europe is different from the US and I noticed that people in Europe have a very different view, understanding, and access to private investing. It is not much common for people in Europe to invest into individual dividend stocks. Therefore Michael’s insight into dividend investing is very valuable and it is great seeing him going the same path as investors in the US do.

My second nominee is Alex from My Trader’s Journal. Alex is a full time financial adviser and trader. He primarily trades options using straddles and naked calls and puts strategies. His money management is very similar to mine, to what I want to do in my account. His blog, trades and experience is a great inspiration to me.

My third nominee is Ben from A Wealth of Common Sense. Ben’s insights to investing, savings, and trading psychology is something I enjoy reading. Many times when reading Ben’s posts I realize that he was writing about my own thinking that I behaved the same way. It is your own mirror. Many things are obvious behavior of investors and thus mine or yours, many other you just discover your own “aha” moment.

And here are my questions to the nominees:


1) When did you realize managing your own portfolio and personal finance is something what makes you happy and what you want to do actively or even as a professional?

2) What or who inspired you the most in your financial career?

3) If you had three wishes what would they be?

4) What was the greatest investment or financial achievement in your life so far?

5) What is your favorite movie from investment or trading world?
 
 

Posted by Martin May 26, 2014

Memorial Day

Caen

Today, I would like to take the opportunity to express how grateful I am for all our men and women who served this country and paid the highest price for it. I am old enough to remember how Americans treated their soldiers in 70’s and it was sad. I also remember how this attitude changed and Americans realized how precious those people willing to die for their country are.

WWII

I am also seeing how is this attitude changing again. Not just towards soldiers, but overall. Are we really forgetting? Do we need a thread to value our way of life? Do we really need Hitlers, Hussains, Al-Qaedas, Stalins, or other tyrants around the world to constantly remind us that, unfortunately, peace on Earth is still fragile?

Flag

Let’s remember all those who fought in all wars and died, so we can be sitting behind the computer and trade stocks without fear or worries. God bless their souls.

US Navy
 

Posted by Martin April 23, 2014

What if it was you – communists are comming, banning and confiscating your profits

Imagine a situation like this: you work hard, sacrifice when you are young, learn a lot, invest a lot and take an enormous risk at the stock market. But because of a big effort, learning, striving, sacrificing your time, money, and life, you succeed and make it up high.

There are stories of successful people out there who made it. And this time I am not referring to stock market tycoons like Jesse Livermore, but regular guys who made it in this generation and reached the top, such as Timothy Sikes, Mark Cuban, or Karen “The SuperTrader” who turned $100,000 into 41 million in 3 years and later into 105 million dollars.

What if, one day, you reach the same level, and make millions of dollars too, or you even make billions of dollars. And I do not consider this impossible. I believe in it and I hope for it and strive for it. Yes, it is my goal too to learn trading and investing so in 3, 4, or 5 years I turn my account into a million dollar business.

Does it sound nice to you? Are you dreaming about the same goal and what life it can be for you?

And then communist Thom Hartmann and similar crones shows up and ban and confiscate excess wealth. These people do not care how you got the money, whether you started a business which turned out to be a billion dollar business, invented a new technology, or made money trading in the stock market. For them, this is immoral to have such money. These people never strived, sacrificed, postponed their vacations or purchasing things they wanted, studied hard. No, these people were sitting on their butt, doing nothing and dreaming how come, you got successful and they didn’t. And so it is very right to steal from you.

See for yourself:
 

 

If you personally believe in these ideas, I want to assure you that there were political systems on earth in the recent past which tried to apply this equality idea and forced it on their citizens. No matter how great idea it is, it only works well on paper and never in reality. The only result was that everybody was poor, but the corrupted political leaders, and if you made a bit more money you were immediately prosecuted and arrested. Citizens became lazy, didn’t strive for their goals and dreams, learned how to steal, (there was a saying: “Who doesn’t steal from the Government, steals from his family”), and the system sooner or later bankrupted.

Take dreams from your people and they will become apathetic crowd with no ambitions. Believe me; I once lived in such a system.
 

The Fabulous Life of Billion Dollar Wall Street Ballers

 

For some people this is an example of greed and all bad in America. For some it is a dream and a goal to strive for.

Which side are you personally standing for?

Posted by Martin February 23, 2014

New hosting

New hosting

Last Friday and this weekend has been quite busy for me. After many failures of my previous hosting, for example last Friday my websites were all down the whole day and partially in Saturday, I decided to change my host from Hostmonster to Webhostinghub.

I have been with Hostmonster for 7 years and they were great, but lately their services began faltering. Loading of this blog became slow, often their servers were down for many reasons (once they told me they had a fire in the server room, next it was a router failure, then DDoS attack, for which they shut down the entire server for the whole day.

I am not willing to take such unbreliability anymore and I decided to switch.

Right now, my blog is running on a new server with a new host. Hope you will all be able to see a rapidly improved loading time and less timeouts or errors or shut down blog.

Thank you all for visiting my blog!

Posted by Martin July 17, 2013

Who owes you?

LibertyI am not going to talk about money someone may owe you, but about surprisingly rising common believes among Americans when we talk about success, opportunities, liberty, and pursuit of happiness.

Usually, in socialistic countries, in central economies, people tend to rely on their governments that they would take care of them. If you traveled to the post-communist eastern European countries, you could hear a statement from older people (I no longer have an experience about today’s young generation) that it was a government fault (no matter what the issue was) that they failed in their lives.

It is no wonder. People lived under a strict rule of everything being managed by the government. The government took care of pre-schools, elementary schools, high schools, colleges, market, regulated prices of everything, housing, your job and your vacation. Without government’s blessing you couldn’t travel, get a job of your dream, study a school of your choice, and pursue your happiness. If something went wrong, it was the government’s fault. But on top of that, you couldn’t say it out laud or you would end up in a concentration camp.

Today, the situation isn’t much different and people still think that it must be the government who must, by its nature, be responsible for their lives. They were raised up in such believes and ideology. They did not know that it could be different that there were other ways to live happy.

It makes me more surprised hearing similar claims from Americans themselves who were blessed enough to be born in a country which was established on democratic principles (although at that time not perfect and fragile) and the Constitution and those principles protect everyone’s rights, liberty, happiness and opportunities.

Every American has his own chance and opportunity to go and pursue his dream, if he or she has one. The beauty of this country is that you have that chance and if you go for your dream, in most cases you will reach it. There will not be any local government or federal government waiting for your money collected via thousands of different fees (and bribes), local business mafia (called lobby) which wouldn’t allow you to get into the business (one would say they dug the economic moat on their own state subsidized business) unless you accept and play their game, using clientelism, protectionism, and corruption. Just try it on your own in any other country and we can share our experiences.

What I have read on the internet this morning was a claim of a commenter that her government owes her her rights:

Annette
Most of the non wealthy that I know don’t possess a victim mentality either.
Although they do believe that they have a right to life, liberty and the pursuit of happiness.
I do believe that I am owed the chance by my government to attain such.
I might make $100k less than the “wealthy” but I find great happiness in life.
I might have been verbally abused as a child, molested etc., but I find happiness today & push out the memories of yesterday.
Sure, bad things happen in live, but I don’t believe that the “masses” have “victim mentality” in excess. There will always be some – but I’ve learned that they seem to be happy in their misery.

Emphasis added by me. Most of the time in the past I met many Americans who understood their country and appreciated the blessings it provides. These days, I am meeting more Americans whining about their life and their country. Where is the patriotism and proud to be American I always admired left? What happened to it?

I understand that economical situation is hard and a lot of people struggle, but that doesn’t mean that it is government’s fault that you struggle. Although I agree that it was the government and their improper intervenes into economy which got us into the economical mess we are experiencing, it also is not a reason to blame the government for our miserable life unless we tried the first and the last of what we could do to change it.

If we allow this to happen to us and start blaming everybody around us, as is typical in the post-communist countries, we will soon slip into a personal lethargy, apathy and unwillingness to do something for ourselves. We will become dependent to our breeders (in this case the government) and unable to take care of our own destiny.

The government owes you nothing and you do not owe the government anything either. Thinking that the government owes you something and is responsible for your life is a first step to everyone’s misery. You will never step out of that vicious circle of blaming the government, the weather, parents, bad roads, bad schools, bad neighborhood, bad health care, bad housing, bad (manipulated) market, bad (manipulated) stocks, and bad this and that. That’s not the way out. This country provides you with opportunities. Just spot them and grab them.

Believe me. I am an immigrant who came many years ago with nothing in his pocket. It was not “waiting for the government”, but hard work and seizing all opportunities provided to me, which made me rich (not by millions in a bank, but my life, work, family and house over our head). It is not a government, but you who can take care of you and make you rich, free, and happy.

Posted by Martin March 25, 2013

A short break

I appreciate all my readers, please come to my web site and drop a few words, even if you think you cannot find anything valuable on this web site, I would like to hear about it and improve my posts.

Last two weeks I was extremely busy at work and this coming week will not be any better, so I skipped some of the scheduled posts and will be posting again later this week or next week.

Thanks you!

Posted by Martin March 14, 2013

Web feature – stock quotes ticker

Web feature - stock quotes ticker

recently I received a few emails telling me that when the visitor comes to my website they receive a warning message about an application asking for permission to run and some consider it as malware.

The reason you are receiving this warning message is due to Java application I added to my website. Read More