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Author: blacktreechaser Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35367  
Subject: OT: dividend/option problem, anyone know? Date: 12/21/2012 9:44 AM
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Off topic, but there are some good minds that frequent this board.

This was all done in my Etrade account.

I was holding Las Vegas Sands (LVS), and sold a call option against the shares....the call was 12/22/12 $40.

LVS has been trading above $40 for a while.

Back in November, LVS declared a special dividend, payable on 12/18, due to the expected tax changes in 2013. So, I was paid $275 instead of the normal $25 on 12/18...an extra $250.00.

On the same day, my call option gets exercised, a few days early from expiration...and it was exercised at $37.50 instead of $40, which really ticked me off.

So, its possible the extra $250 was some sort of capital gain distribution, and some complicated legal accounting would reduce the price of the shares, and change the strike on the call option? But from the news releases, it seems the extra dividend was just that, a dividend.
My guess is that the holder of the call option meant to exercise it early to grab that dividend, and missed it by one day. So someone (Etrade or someone else) did some creative illegal accounting, and changed the strike price of my option from $40 to $37.5.

Anyone have any theories/ideas about this?? I'll call Etrade and LVS and try to find out how this happened.
P.S. If Etrade screwed up and was a day late exercising the option, they should get stuck with the $250 loss, not pass it on to me.
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