{"id":1663,"date":"2009-12-31T12:28:14","date_gmt":"2009-12-31T06:58:14","guid":{"rendered":"http:\/\/www.niftylivecharts.com\/blog\/?p=1663"},"modified":"2009-12-31T12:28:14","modified_gmt":"2009-12-31T06:58:14","slug":"what-is-a-tripple-dipper","status":"publish","type":"post","link":"https:\/\/www.niftylivecharts.com\/blog\/what-is-a-tripple-dipper\/","title":{"rendered":"What is a Tripple Dipper"},"content":{"rendered":"

Tripple dipper means making \u00a03 Profits on 1 Stock Trade .This is a rather simple strategy with which I am sure a lot of seasoned traders are very familiar, possibly under some other name with which I am not familiar.<\/p>\n

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Here\u2019s how the play is made<\/span><\/strong>.<\/div>\n
You buy 300-500 shares of a stock that is going to be paying a dividend with in the next 15-45 days. You sell the 30-60 day covered call taking in the premium money and giving you that amount of money downside protection to offset any move against you.<\/div>\n
The ideal trade will play out like this. You will buy the stock, it will pay the dividend while you own it, you sell the Covered Call collecting the options premium money, and hopefully the stock will be called away at the strike price. Obviously, you have to make sure you only sell the call with a strike price higher then your entry price.<\/div>\n
Now let\u2019s apply the math on a hypothetical trade. Let\u2019s say you buy MO at $50 and it is paying $.25 dividend and the $51 call option is selling for $.25 with an expiration date 45 days out. Let\u2019s further assume the stock pays the dividend, and moves above the strike price of $51 by the expiration date and it gets called away. You will earn $.25 for the dividend, $.25 for the premium money on the call and $1.00 on the stock position itself for a total gain of $1.50 on 300 shares. That\u2019s $300 on a $7500 investment (using 2:1 margin account) for a 24% annualized yield on your money. More of the math: $300 divided by $7500 = 4% X 8 = 24%. Keep in mind you made the $300 in 45 days meaning theoretically you can do this 8 times a year. That\u2019s how you get the 24% annualized yield. Not to shabby! (Because commissions vary, I have not put them into the equation, something you will have to do obviously.)<\/div>\n
Seems pretty easy doesn\u2019t it? Well it is, when it works. But like everything in the stock market (or in life itself for that matter) there is no sure thing.<\/div>\n
Any number of things can happen. Here are just a couple of things you have to consider. First off, I would check to see what all the analysts are saying about any stock you are about to try this on. Make sure the company has a solid dividend history. I would also caution against making the play on a stock that is due to report earnings while you are in the options period. Also keep in mind that as a general rule a stock will dip in direct relationship to the divided paid.<\/div>\n
Obviously this strategy is not always going to play out as our hypothetical trade did. However, I have had results similar to that as well as some much better, and “yes” some that did not work at all. What makes the play less risky than the stand alone buy and hold trade is that no matter what the stock does, you get the dividend and the options premium money giving you that much downside protection on a move against you.<\/div>\n
<\/div>\n","protected":false},"excerpt":{"rendered":"

Tripple dipper means making \u00a03 Profits on 1 Stock Trade .This is a rather simple strategy with which I am sure a lot of seasoned traders are very familiar, possibly under some other name with which I am not familiar. Here\u2019s how the play is made. You buy 300-500 shares of a stock that is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[4826,918,523,917,4824,4825],"class_list":{"0":"post-1663","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-how-to-make-tripple-profit-with-1-stock-trade","8":"tag-stock-market","9":"tag-stock-trading","10":"tag-stocks","11":"tag-tripple-dipper","12":"tag-tripple-profit-in-stock-market","13":"entry"},"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/1663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=1663"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/1663\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=1663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=1663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=1663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}