AMTD Special Dividend

Discussion in 'Stocks' started by quantdropout, Dec 5, 2005.

  1. Does anyone know when this (AMTD $6.0) will be paid? Also, check out the number of puts being purchased in 06 1st half.
  2. CONR


    I think early Jan.
  3. Chagi


    Without looking at any of the info about the stock, it does make sense that people would be buying puts on a dividend paying stock in anticipation of it going ex-dividend.
  4. How did it works when you buy put and the company issue a dvidend? Let say the company is trading at $100, and issue a $5 dividend. Does the option traded as the stock is down 5%?
  5. I know someone that tried this with MSFT and the special dividend a year ago. He was shocked when the strike prices were adjusted along with the dividend being paid. May want to make sure a similar thing won't happen with this.
  6. Thanks for the heads-up. Your correct, evidently the strike will be reduced by 6 bucks.
  7. See, the big boyz wont let you make a living.
  8. Chagi


    Thanks for posting this. I seem to recall this being mentioned in my risk management text (yes, I'm a uni student), but I think that this is determined by the options exchange, i.e. they can choose whether or not to adjust strike prices?
  9. I honestly don't know who or how that adjustment is determined. I just remembered a friend that runs a hedge fund being very excited about buying MSFT puts in front of the 3 dollar dividend last year. He was under the impression that he was seeing something the rest of the market was missing (that never happens).

    Another point regarding this, I am currently involved in several REIT stocks. They pay a heavy dividend, but the option strikes are never adjusted. I assume there may be an explanation on one of the option exchange websites.
  10. Are you honestly telling me that you had a friend running a hedge fund, and he didnt know that Microsoft would adjust the strike prices downward? Wow. It must not take much to work a hedge fund these days.
    #10     Dec 6, 2005