$JEPI ( JP Morgan ETF Trust Equity Premium Income ETF) just cut its monthly dividend 13.9% to $0.3654 per share from $0.4246 per share. With the ETF at about $53.66 per share, the annualized dividend yield is down to a still nice 8.17% from over 10% a few months ago.
JEPI trades covered calls on big cap dividend stocks for income. When the market becomes less volatile, its monthly distributable cash flow shrinks and it cuts its dividend.
When market volatility rises, options prices rise and premium income increases.
Despite the dividend cut, the pre-opening price on JEPI looks like it will be up a bit from yesterday’s close.
I own JEPI because it is an income-investment where I can put some of my cash while I wait for a bull market.
With interest rates likely to continue rising, I may wait a few months before we get a real bull market that includes most stocks.
Indeed, if investors in Big Tech stocks like Microsoft (MSFT) and Apple (AAPL) decide to take profits in the face of a slowing economy and higher interest rates, we may be in for a more bearish market.
No one can predict prices. All we can do is trade. It’s all about Stock Picking and Trading Options for Income.
1. Need more sector diversification? 7 of 12 companies in Cons Staples.
2. Stock price volatility if hold during quarterly earnings reports. Do you avoid earnings?
3. Consider establishing and holding a dividend-paying company CC position only during the 4 months each year when they go ex-dividend -- not the 8 months when they don't pay a dividend. See my Dividend Capture Strategy at the link below; especially #5 in the list and #3 in the spreadsheet at the bottom of the article.
Jeff, At the moment the portfolio isn't as diversified as I like. But I'm in other things plus a lot of cash, so I feel pretty diversified. I'm also short puts, which helps diversification. I assume my readers are similarly diversified and probably should put that in my articles.
As you know, I frequently do your trades. Your site a great place for traders to get good ideas for free. In paid services, subscribers would be paying $200 to $500 a year for a subscription to your service. Many would make that money back in profitable trades in a month or less.
NEM is up $0.89 to $40.88. It was recently put to me at $45. I just sold NEM 6.30.23 (30 days, delta .13) $46 strike for $0.25. RoR .56%, ARoR 6.76%, dividend yield on net debit 4.1%. My NEM 6.16.23 $40 puts have an ARoR of about 14%.
Market opens lower. Looks like traders are more worried about more interest rate hikes, drone attacks on Moscow and some disappointing earnings reports.
Wall Street brokers and banks are talking their books about rate hikes, which hurt their businesses. I think the fight on inflation has to continue. It's better to take the pain now than die later.
Today's market shows speculators are worried that the McCarthy/Biden debt limit deal may not get through Congress. The rules committee in the House will give some indication of the deal's prospects. Then we'll wait for the House to vote Wednesday after the markets close. Then the Senate may take until next week to vote. How many traders will play the uncertainty surrounding this nonsense?
The question now is, if the debt limit deal is turned down by Congress, how will stock markets react? Most people expect a big drop. If that happens, puts prices will go up giving sellers of cash secured puts opportunities to sell puts at the extreme bottoms for good premium income and possible good discounts at ATM and OTM puts strikes.
Then, do you sell puts on AI, energy, utility or just some good dividend stocks that you already own?
I expect my SO and MRK puts to be exercised on June 2. Next week I'll sell covered calls on them.
MY KMI calls expired worthless on 6.26. I'll sell some covered calls on them if the stock rallies. Otherwise, I'll wait for the House and Senate to verify McCarthy's debt limit deal before I'll do more trades.
$JEPI ( JP Morgan ETF Trust Equity Premium Income ETF) just cut its monthly dividend 13.9% to $0.3654 per share from $0.4246 per share. With the ETF at about $53.66 per share, the annualized dividend yield is down to a still nice 8.17% from over 10% a few months ago.
JEPI trades covered calls on big cap dividend stocks for income. When the market becomes less volatile, its monthly distributable cash flow shrinks and it cuts its dividend.
When market volatility rises, options prices rise and premium income increases.
Despite the dividend cut, the pre-opening price on JEPI looks like it will be up a bit from yesterday’s close.
I own JEPI because it is an income-investment where I can put some of my cash while I wait for a bull market.
With interest rates likely to continue rising, I may wait a few months before we get a real bull market that includes most stocks.
Indeed, if investors in Big Tech stocks like Microsoft (MSFT) and Apple (AAPL) decide to take profits in the face of a slowing economy and higher interest rates, we may be in for a more bearish market.
No one can predict prices. All we can do is trade. It’s all about Stock Picking and Trading Options for Income.
1. Need more sector diversification? 7 of 12 companies in Cons Staples.
2. Stock price volatility if hold during quarterly earnings reports. Do you avoid earnings?
3. Consider establishing and holding a dividend-paying company CC position only during the 4 months each year when they go ex-dividend -- not the 8 months when they don't pay a dividend. See my Dividend Capture Strategy at the link below; especially #5 in the list and #3 in the spreadsheet at the bottom of the article.
https://coveredcallsadvisor.blogspot.com/2023/01/the-covered-calls-advisors-dividend.html
Best wishes,
Jeff Partlow
Jeff, At the moment the portfolio isn't as diversified as I like. But I'm in other things plus a lot of cash, so I feel pretty diversified. I'm also short puts, which helps diversification. I assume my readers are similarly diversified and probably should put that in my articles.
As you know, I frequently do your trades. Your site a great place for traders to get good ideas for free. In paid services, subscribers would be paying $200 to $500 a year for a subscription to your service. Many would make that money back in profitable trades in a month or less.
Thanks for the comment.
Don
NEM is up $0.89 to $40.88. It was recently put to me at $45. I just sold NEM 6.30.23 (30 days, delta .13) $46 strike for $0.25. RoR .56%, ARoR 6.76%, dividend yield on net debit 4.1%. My NEM 6.16.23 $40 puts have an ARoR of about 14%.
Market opens lower. Looks like traders are more worried about more interest rate hikes, drone attacks on Moscow and some disappointing earnings reports.
Wall Street brokers and banks are talking their books about rate hikes, which hurt their businesses. I think the fight on inflation has to continue. It's better to take the pain now than die later.
Today's market shows speculators are worried that the McCarthy/Biden debt limit deal may not get through Congress. The rules committee in the House will give some indication of the deal's prospects. Then we'll wait for the House to vote Wednesday after the markets close. Then the Senate may take until next week to vote. How many traders will play the uncertainty surrounding this nonsense?
The question now is, if the debt limit deal is turned down by Congress, how will stock markets react? Most people expect a big drop. If that happens, puts prices will go up giving sellers of cash secured puts opportunities to sell puts at the extreme bottoms for good premium income and possible good discounts at ATM and OTM puts strikes.
Then, do you sell puts on AI, energy, utility or just some good dividend stocks that you already own?
I expect my SO and MRK puts to be exercised on June 2. Next week I'll sell covered calls on them.
MY KMI calls expired worthless on 6.26. I'll sell some covered calls on them if the stock rallies. Otherwise, I'll wait for the House and Senate to verify McCarthy's debt limit deal before I'll do more trades.