Active management?

Active or mechanical trading plan? Why not both? 75% of time I trade mechanically. 

Not lot of new thought goes into the process. But from time to time I believe I can add alpha buy making reasonable evidence based decisions to increase my returns. 

This month MORL, SHMD and BDCL all have their big payout. BDCL will pay whooping $.78 a share. That is 4% of current value. 

I purchased 1000 shares at $19.58 last week. If you look at chart below we see solid two month support zone at $19 level. 

For the last two months price bounced off this zone. So A stop loss around $18.75 range would be perfect. I’m risking $.83 ($830) for shot at $780 dividend and shot at even more upside. 

I hope to see BDCL trade up into high $19.80-$20 range. Ex div Day price will drop by $.78. Assuming a slight move higher ex div Day price drop should keep me above my stop point and put me few hundred bucks below my entry price. I would then have option close the trade and capture the dividend or let the trade play out as long the $18.75 holds.

Most likely I will sell half once I qualify for the dividend and price gets back to even due to position sizing. 

If BDCL runs higher in 10th ex div date might be prudent to sell part of the position because u basically captured the $.78 in price appreciation. I would be tempted to sell enough shares to take home that money, and qualify for large dividend to boot!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s