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I guess that depends on your definition of a progressive dividend. I have no problem with buybacks and at the current price I think it is a sensible investment by LLOY in itself. This is on the assumption that downstream, the shareholders will see a longer term benefit to justify the loss of a potential dividend in the now. I expect a progressive dividend to reflect an increase on the previous year, plus an additional amount to reflect the reduced number of shares. It's bad enough that LLOy just arbitrarily rebases the base dividend and that we keep paying bonuses to senior staff to get the share price back to a level that we have already paid someone else to do the same.
Just a thought — we need to ensure that the masters of financial wizardry don't try and bamboozle us with a progressive dividend that is just a reflection of the reduced number of shares post buy back. Assuming approximately 7% buyback, a dividend of 2.15 pence next year will not be a real progressive dividend.
Jotom, I don't think they need to worry about stamp duty. This can be bypassed, if by no other mechanism than trading CFD's.
I use Interactive brokers who cover all CFD's with immediate purchase/sale of equivalent stock. They do not pay SD on these purchases.
Hardup. I stand by my post. Sufcessex is correct that the bank will make more at 0.5%. The problem is that the reason the article used the term 'blow' was because they will be restrained from from making even more money from rates in excess of 0.5%. As I said, please read the article carefully.
I note that the premium on short term LLOY Calls, even those deep in the money, seems a bit steep. IMHO this indicates that the MM's are confident that the share price is going to bounce back. I trade large numbers of Calls ands keep close tabs on the premiums. I was hoping to pickup April 52 Calls on the cheap with this downturn, enabling me to close my CFD's when LLOY hits 52P , and let the Calls take over, up to ex-dividend date. Such is life.
Noted in the fine print a dividend accrual of 56 basis points. As a dividend was paid last quarter, is this an indication of what has been set aside this quarter. Also, how does this convert to the hard earned stuff.
The only advantage to consolidation is that it would make trading in LLOY Options much more appealing. At present the brokerage costs are extremely high relative to the option price, especially on out of the money options. Otherwise we just have a higher priced share, with psychologically at least, a lot further to fall.
LTI: I prefer LIT (Limit If Touched) orders. I set the LTI slightly below (or above if selling) the Limit price that is placed at the same time. Usually gets filled at LTI price and almost always get completed order at limit or better. I use Interactive Brokers and have for the last 20 years.
I prefer to buy deep in the money call options in preference to shares. This was particularly effective when LLOY was not paying any dividends. Last year when the shares were 24 pence, I purchased 1000 16 Dec20 Calls(1 million shares) for 8.8 pence. This was only 0.8 p above true value. I sold when the shares were around 35p, obtaining the same gain (less 0.8p) as buying the shares. This has the additional advantage of limiting your downside, to the cost of the option. Furthermore, even if the shares had dropped to 16p, because the calls had extended time to expiration, they had considerable time value, reducing the loss compared to an equivalent purchase of shares. I raise this point because the premium on deep in the money calls has increased substantially recently. I just purchased a Mar22 40C for 9.8p with LLOY at 47.895. A premium of 1.9 pence above intrinsic valuation— more than twice the equivalent premium last year. The premium on out f the money calls has become even more divergent. Methinks the market makers know which direction this share is headed (UP). DYOR.