Thursday, October 31, 2013

The Secret Strategy to Gettting More Yield Out of Your Dividend Stocks.

Is this a secret stock kung fu trick that only masters can learn? Not quite... It is actually quite simple. After the ex dividend date, and assuming this is a yearly or bi yearly dividend, just sell covered call options on the stock. Let's say we sell options on MMTRS (Mills Music Trust). We can sell short term option contracts on these, and we will get paid a premium for allowing the investor to have the right to buy Mills at the current price. If the contract expires and mills does not go up, then we get to keep the premium. If it goes up, then we will have to sell it to him or her. It may or may not be much, but when you want to get the most out of investment income, it sure adds up.

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