I know, many dividend investors will disagree with me but I decided to abandon dividend investing in our business account. It was a tough decision and liquidating my dividend portfolio was hard for me – emotionally. But investing should be void of all emotions. You shouldn’t be in love with your stocks or strategy. So why I decided to abandon dividend investing?

The short answer is simple. I make more money trading futures.

I trade options against futures and futures contracts alone and I can trade both sides of the market. If the market is bad and selling, I can trade calls and call spreads. If the market is optimistic, I can trade puts and put spreads. But the biggest benefit of options against futures is that if the trade turns heavily against me, I can just roll it into the opposite trade (like calls into puts, or puts into calls), or roll it higher or lower (strikes) as needed and in many cases still as credit trades and thus for a profit. I can’t do that with stocks.

For example, I invested in Icahn Enterprises (IEP) stock. Then it got attacked by a short seller. Later on the company cut the dividend. The stock crashed more than 50% and never recovered since then. Many of these crashes happen after hours or before regular trading and when the market opens, you are already sitting on a pile of losses. And you can’t do anything about it. Although I could mitigate the losses by trading options around the position, and received plenty of dividends, that position was still under water. All you can do is “ride it through.” But this “riding through” it may take several years and in many occasions, you may never recover.

If you are going to tell me not to invest in questionable high yield “traps”, let me remind you about once dividend aristocrats and kings like AT&T (T), Disney (DIS), Walgreens (WBA), or WYNN… or some times ago, Kinder Morgan (KMI)… or Realty Income (O)… all these stocks were once shining dividend payers… then they crashed, cut the dividend, and many never recovered. Realty Income (O) is down since the end of 2021 and it may take another year or more to get back to the previous all time highs. And what do you get for it? A measle 4% dividend. Not worth it.

In the last week or two when the market crashed, trading options against futures I made more money than in regular bull market.
 

 

All I had to do is either roll in the money puts into OTM calls, or roll expiration away and lower strikes, and start trading calls. Now, when the market is again optimistic and turning bullish again, I am changing my trading into puts and put spreads. I only have one call strikes trade that got into trouble today and I am rolling it out, away, and partially converting those calls into puts.

For example, here are all the adjustments of a call trade that got in the money thanks to market participants’ idiocy (few days ago they were freaking out about job caused recession, today they are in FOMO):
 

 

Of course, the trade is not over yet and it will need more work, but I could roll it and improve my chances of ending this trade as a winner despite being busted. What can you do with busted stocks? Nothing. All you can do is hoping that one day (in 10 years), it will get break even. Like this guy who invested $700,000 of his grandmother’s inheritance into a single stock Intel (INTC):
 

 

 

That guy is not set for 10 years (could be sooner or later) of waiting to see if his investment recovers. Many times these drops happen after regular trading or at dark pools, and we, the small guys, do not have access to this trading and all we can do is to watch our positions destroyed. I had about 40 stock holdings in my dividend portfolio. And I had stocks that were doing well one season for a few months while other were destroyed and vice versa. Then you have earnings reports. Many times the stocks crash 20% on bad guidance and rarely go up. Some stocks like Netflix (NFLX) can drop huge and recover all during after hours trading (so, again, we cannot participate). Others take years to recover. Investing is not what it used to be – buy a good quality stocks and hold them. Even a good quality stocks can get crushed during earnings season thanks to the Wall Street short-sight. And I decided to be done with this.

Will I trade or invest in any stocks then?

I might, but rarely. I will be buying and selling LETF (leveraged ETFs) based on my market metrics like volatility and sentiment. The gauges I was working on work well to get me in the LETFs during bull markets and out into the safety during bear markets. That will be all I plan on trading. Other than that, I will stay with trading futures.

&nbps;