The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: Retirement, college, and Obamanomics||Date: 1/3/2013 1:31 AM|
|Author: KluverBucy||Number: 71191 of 79721|
It requires some pretty serious back-peddling to go from your orignal statement of:
"The market paid a dividend and SOMEBODY received it, and if it wasn't you then it was the IUL company."
"The holder of a call indeed doesn't directly collect the dividend, true. But he does, however, indirectly get the dividend by the fact that the price of the option is lower than it would be if the stock didn't pay a dividend"
Nobody was claiming that options pricing isn't affected by whether the underlying security pays a dividend. But your original claim that the insurance company was actually pocketing the dividend payments was simply false.
However, the "discounted" cost of the option does directly relate to my previous question: "do the insurance companies truly use all of the available funds generated by the fixed income securities to create these call spreads or are they skimming some of the income off the top?" For this sytem to work be