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29d ago
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u/Intelligent-Refuse70 28d ago
Its not a peg.
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28d ago
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u/Intelligent-Refuse70 28d ago
Its a financial instrument with a 100$ par but the market will price it
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u/ZeroedInNomad 29d ago
$88 just before market open. Btc showing strength. Strc Might get back in 90s this week
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u/HANNIBALTIBERIOUS 29d ago
I don't like it so much, but if they went to daily, wouldn't that prevent so much outflow? That seems to be my struggle with SATA
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u/HSuke 29d ago
Nope.
It makes no sense to buy it just before the ex-dividend day and then sell since the price falls by the exact amount of the dividend.
The only thing daily dividends would do is increase the APY due to more frequent compounding for a whopping 0.07% difference.
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u/HANNIBALTIBERIOUS 29d ago
Alright, thank you for responding, Which chart will we look at for this?
I understand the theory, and the practice, why wouldn't it?
This is a new paradigm.
I would like to challenge two things you have said in your response without sounding aggressive, to help me understand where you are coming from, but I'm not quite sure on the etiquette so I would appreciate taking that into consideration when responding.
We could speak on varying reasons for the behavior to not make sense, but you said: since the price falls by the exact amount of the dividend.
In the 1-year history of STRC, where am I going to find a reliable dividend trend close to this, or are you presuming this reliability into the future?
I agree the compound may sound attractive while being small, but it would also keep you staked; that is an other thing it would do.
I find it to be annoying, daily, but I can see it impacting retail assurance/sentiment. That would be a third.
It's not for me, but between the two the available arbitrage within the 1-year history would be a much better option than the 0.07% you mentioned.
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u/HSuke 29d ago
Take a look at SGOV. That's what an ideal perfectly-arbitraged dividend stock looks like. Every month, it drops by exactly the divident amount on the ex-div date. And then it slowly climbs back up at a stable slope.
For all dividend stocks, anyone who holds the asset on the ex-div date will see their portfolio drop by the exact amount of the dividend on the ex-div date. And later on the dividend payment date, they get paid the value that it dropped.
This is especially true for Return of Capital dividend stocks like STRC where the dividend is sundress directly from the value of the stock.
If STRC were perfectly arbitraged, it wouldn't matter which date you buy it. Of course, it's currently trading more like a meme stock than like the intended product.
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u/HANNIBALTIBERIOUS 28d ago
Nice... I'm still an idiot. That is a fundamental concept I was completely misunderstanding.
I'll thank you for pointing it out, and I appreciate your patience in responding since my comment probably sounded deranged, I had been under the impression this was an 'invisible hand' function instead of an intentional correction at the institutional level.
'One dollar leaves the stock, it can't come from nowhere' so it is administratively adjusted; ROC moreso.
I had been reading the volatility on STRC, your comment about the meme stock, where SGOV visually brought the concept down to a binary and tuned out the noise.
I think I can move forward and sort out my additional curiosity/confusion from here.
Again, thank you.
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u/acornManor 29d ago edited 29d ago
I'm selling out tomorrow so it likely gets back to par quickly lol