Most of the time, buying options as lotto tickets isn't a good idea. They also expire, so unless it happens to get bought in a very specific time period, you'll just be throwing away money.

You're basically asking if you can sell at a point you deem is a high point and make money if it goes up or down.

If you want in for the long haul, buy and hold is your safest play.

reading several academic studies claiming on ex-dividend days stocks fall by less than the amount of the dividend because of dividend/capgain tax rate differential.

if you have a non-taxable retirement account why is buying day before ex-div & selling day of not a free lunch?

You already paid the taxes, so you're going to be buying less than you would have otherwise.

Posted in OOT as well.

FHA loan, 60 days from closing. Some money leftover from seller paying closing costs that I can put towards buying down rate.

Lock in 3.625 (bought down to 3.25) now, or let it ride for 15-30 days.

Thanks!

Anyone here ever buy non performing assets from a bank or other similar entity? Could you tell me what the process was like (due diligence) and what you did with the note?

Wasn't sure if this merited it's own thread so I thought I would post it here. I'm looking for some feedback on how to potentially monetize a project I started. The project is readygolfrewards.com. It is a free pace of play incentive program based off a business sized card that offers golfers discounts for fast play after they earn 10 stamps. The discounts can be redeemed at any course in the network.

My current model is that the card functions as an email gathering tool for both the golf course and the site as the back of the card requires an email address(assuming they have one) to earn a stamp/participate. I collect completed cards. The program is "free" for the golf courses and golfers but that the golf courses have agreed to give me a round/year that I can raffle off on the website.

If the idea is any level of popular, years from now I will probably have a big/maybe valuable email list and may be able to generate some traffic to the website with the giveaways and the fact that a golfer has to go to the site to see the course list/discount. I could see some potential for advertising a long ways down the road but what I was really looking for feedback on was the potential for some sort of "premium" version of the program that is a win/win/win (course/golfer/site) that could be implemented maybe next year if the concept proves valuable this year. I've had a few ideas but none that I really love.

Thanks for any feedback at all.

If you could envisage incorporating some kind of "points for spending" mechanism into your concept then that could be an alternate way to monetize. Im referring to an a coalition loyalty scheme model, where there is a seperate loyalty scheme entity that earns its revenues through sale of reward points to the corporates in network. Im not sure how feasible this would be in a niche / localised market such as golf courses in one particular state, since all the member companies would be very direct competitors, but you might be able to think your way round this.

if what im saying is not clear, there is a large publicly traded airline loyalty scheme in Canada, and one in Brazil - you could visit the investor relations part of their websites, and scan their presentations for ideas on monetizing.

BFI,

Quick question about the options market of a thinly traded stock, MNKD. I have 50 Jan15 $5 calls and 100 Jan14 $4 calls. I'm worried that I will be forced to exercise (instead of selling to close) the options because of a lack of liquidity leading to me not getting maximum EV.

Should I plan on liquidating other assets to pay for the disposition?

TIA!

if you're too worried about it, i would short sell the stocks a couple of days before the exercise date if that is an option.

Ok interesting. So I'd be creating a market for myself? The exercised option shares would be from the disposition of the short sale?

Also, is there a tool that you guys use to maximize EV given different variables and timelines? For example, going back to MNKD, results of their latest trials will be presented sometime in August. I expect the pps will be $7 in October. How would you guys maximum profit given that assumption? What if, instead of $7pps I wanted to know which option would give the highest return at $12pps? Same thing with dates.

http://www.optionsprofitcalculator.c...long-call.html

I've been using the above link fyi

You'd just be effectively closing your position out when you sold the underlying shares. If there are liquidity issues, it might be tough to borrow that many shares to short. You'll also be paying more transaction costs I believe.

Stupid question:

If I choose to have dividends reinvested into the security from what they came from, do I have to pay separate commissions each time?

How does it work?

If I only get a .50 dividend per quarter, are they going to take a $7 commission for doing that?

I've never seen anyone ask this question, but it sort of makes sense.

No, you don't pay every time, they are automatically put back in the fund and free of charge.

I take it that "fund" can also mean stocks too? So I could have my dividends reinvested back into stocks as well, free of charge?

Thanks.

Yes, in almost all cases. I personally have never seen a major brokerage (vanguard, fidelity, etc) charge a fee to reinvest dividends.

I guess I'll ask while we're still on the topic.

Is it best to have those dividends reinvested, or better to have it paid out in cash so that you can later use that cash towards other investments?

Thanks again, and thanks for the help.

you should just ask your broker about fees, it sounds like you are describing a dividend reinvestment plan which can sometimes incur fees and this will vary from stock to stock. this is different to a fund where explicit charges for automatic reinvestment are less common.

regarding which is best that depends on your view of the attractiveness of the investment vs. your liquidity needs, so no one can tell you which is best there. but provided its not a tax advantaged account where your total annual contributions are limited then why couldn't you just add cash from another source if you found another opportunity to invest?

I've been referring to my Fidelity IRA, which currently is 73% invested and 27% cash since I haven't been actively seeking investments. I haven't contributed to it in a few years because I haven't had the income.

Now, I have the income, but what is happening is that I have my IRA, which has been open for 9 years (not funded all of those years), I am now contributing to a pension from a new job, AND I have money being taken out for another retirement account. So I basically have 3 retirement accounts all locking up my money.

To get to the point, I haven't considered adding more to my IRA due to the fact that I don't want to lock up more money and not be able to get to it.

I'm gradually considering opening up a new investment account that I can actively invest and still be able to take money out of it down the road.

I was only asking about the dividends because I keep an eye on my IRA stocks and was just curious how it would work.

--to make a short story long.

Hi guys, I'm a new investor so sorry for the noob question, I have a question on the buying power of my trading account. I have $2500 in stocks and $2500 in cash in the account and it says I have around $4500 in buying power. Is that similiar to a margin account where I'm trading on leverage?

Essentially are they using my $2500 in stocks as collateral. Suppose I use all of my buying power and purchase more stocks, what happens when my stocks that I purchase go down in value? Do i just fund my account with more cash to pay my broker?

Sounds like a margin account to me.

Yeah that's what it sounds like. I've never bought on margin before so not quite sure how it works.

I've never had dividends paid in cash. I've read some people prefer to take the dividends, and you have to remember it depends on if this is a taxable event or not. I'm actually unsure what happens in a retirement account but I'd think it's untaxable as long as it stays in the retirement vehicle.

You can do a simply Google search and find out some more info on dividends and different strategies, but like everything it simply depends on your situation and what's best for you. Like I've said, I always reinvested.

Sorry I couldn't be of more help.

Margin get be tricky but I used to work for a brokerage that offered margin accounts so I'll try to explain. In a margin account your margin level is how much you can buy.

So cash is obviously 100% margin so if you have $2500 cash your margin is $2,500.
Since you have $2,500 stock and your margin is $4,500 the margin rate on your stocks is 80% (2000/2500). In other words you'll be able to borrow 80% of the value of your stocks. Think about it as a variable LOC where it's based on 80% of stock value.

The rate depends on the quality of your stock. Sometimes they wont let you borrow at all on stocks, such as penny stocks/pink sheets stocks etc...

I always take dividends in cash mostly because I can't be bothered doing the book value calculations on each dividend. Every time you receive a stock dividend it's going to change your cost base.

I see now. Ok, first, if there is any type of company match, put in the % that is needed to get 100% of the match. Do whatever is needed for the pension, also. After that, however, it's up to you. If you have a regular IRA and you want the ability to take money out later, then you might want to open a Roth IRA, which gives you more options of taking money out of it down the road if you have to. If you open a regular old investment account, you can do whatever you want in it but you'll be taxed on it, the % depending on how long (long term or short term capital gains). Taxes can have a huge impact of your positions.

Finally, don't forget you have income limits, I think it's 110k. If you make more than that you can't contribute to it. You'll have to go with company 401k. Remember, most 401ks allow you to take loans out for about 50% of it's value if need be, but you'd have to check the specifics of each plan.

Hope that helps?