No. of Recommendations: 1
With long ITM [call] options you are missing out on the the 1.75% dividend yield, which you have to add to your cost if you compare to the underlying.

Now do puts.

As Ken Fisher says, the market takes into account all known information.
Everybody and his brother knows that options do not get the dividend. Since the entire market knows that, it is factored into the price.

Demonstrably provable.

SPY gets dividends.
The S&P 500 index does not get dividends.
SPX = S&P 500 Index Options
XSP = Mini-SPX Index Options (1/10'th of SPX)

Yet the prices of the identical call option contacts of XSP and SPY are the same.

What is wrong with that original statement ("missing out on the the 1.75% dividend") is the same mistake that the Dividend Growth investors make. That is, that dividends are an additional source of profit rather than simply one component of the total return.

Of course, I could be wrong.
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