Norman Roberts Blog | Guaranteed Profitable X-Date Trading Strategies | Talkmarkets
Individual Investor

Dr. Norman Roberts is a very successful investor who almost exclusively invests in preferred fixed-income equities.  

On March 2, 2016, Dr. Roberts wrote his first article as a Seeking Alpha contributor He soon became popular, although a mildly controversial contributor, ... more

Guaranteed Profitable X-Date Trading Strategies

Date: Friday, January 8, 2021 8:32 PM EST

My bestselling book The Art & Science Of Preferred Dividend Investing chronicles my success as a preferred dividend investor; however, it was written for an audience of primarily wealthy individuals seeking to protect their wealth while it earned them a respectable relatively risk-free return. This article concerns A Guide To X-Date Oriented Short-Term Trading Strategies specifically written for investors seeking to profit regularly and consistently utilizing short-term trading strategies I developed that are based on and around the all-important x-date.  

Initially, I began by selecting a list of dividend-paying common stock that pay a quarterly dividend above 0.35 and offer a dividend yield of at least 8.5%. The list contains the following: ARI, BCSF, CAPL, KNOP, MMP, MPLX, NRP, OKE, PSXP, SHLX, STWD, SUN, TCP, USAC, WLKP, CQP, HEP, MO, NS.

Although there are a large number and variety of trading strategies, the strategies I have developed are based almost entirely on stock paying quarterly dividends and their all-important x-dates, although, on occasion, I do find semi-annual and annual dividend-paying stock useful for my purposes. However, those securities paying a monthly dividend are of no concern simply because the dividend amount is insufficient to more than minimally affect the stock's price in relation to its x-date.

Theory: To review: each quarterly dividend payment reflects the dividend earned during the previous quarter. Consequently, a dividend earned in April covers the company's distribution of monies earned during January, February, and March. Should those shares be sold prior to the x-date, the buyer will receive that dividend. If those shares are sold on or after the x-date, the seller retains the dividend. Consequently, shares sold prior to the x-date are more valuable because of the quarterly dividend that comes along with the shares. Likewise, because the buyer will not capture the previous quarter's dividend, he will bid less for those shares on the x-date. Obviously, it is no secret that a stock's price will trend higher prior to the x-date and fall on the x-date. Knowing this, I was determined to formulate a trading strategy designed to best take advantage of this information.

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Comments

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Andrew Armstrong 1 week ago Member's comment

Thanks for sharing.

Bruce Powers 1 week ago Member's comment

Thanks for the info, Norman.

Norman Roberts 1 week ago Author's comment

My pleasure, Bruce. If used properly, the d-play, my favorite strategy will earn profits between 70 - 90% of the time.

Bruce Powers 1 week ago Member's comment

Wow!

Norman Roberts 1 week ago Author's comment

It's actually going to Vegas and being able to count cards.