UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: BenHacker Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: OT: dividend/option problem, anyone know? Date: 12/21/2012 10:05 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
"...LVS declared a special dividend,"

Options Clear Corporation (OCC) I believe has the final say on whether "special" dividends should get factored into the option strike price. there is no fixed rule as far as I know such as "if the special divy is >X% of share price". When a special dividend is announced, there should be a notice on the option exchanges website or through the OCC about how the special will be treated.

So in this case, it sounds like it did get adjusted into the option but I don't think it has nothing to do with the regulatory status of the dividend, it has to do with "fairness" as judged by the OCC.

This is my best understanding of the issue, but I rarely transact in options, so apologize if this is not correct.

Ben
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement