Valero Energy: Dividend Capture With An Option Hedge
By Robert Weinstein:There are many dividend capturing strategies, but using a call option to hedge against downward price risk is my favorite. I have found I must be highly selective, I selected the following company, in part, based on the combination of gaining a relatively good option premium with dividend added on.Valero Energy Corporation (VLO) operates as an independent petroleum refining and marketing company. The company operates through three segments: Refining, Retail, and Ethanol. The company was founded in 1955 and is based in San Antonio, Texas.Valero Energy Corp Yield: 2.41% Dividend Amount: $0.15Ex-Dividend Date: February 13, 2012Beta: 1.44Here is a look at the fiscal year revenue.
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I research the different call options and calculate the expected probabilities based on Beta, Bid, Offer, Volume traded the current day, open interest, and time value / implied volatility. The options offer some level of protection fromComplete Story »
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