I want to hedge my portfolio with S&P500 options and have been looking into it quite a bit, but have some unanswered questions I'm hoping people here are knowledgeable enough to answer for me: 1.) Is the S&P500 regular dividend adjusted (not just special dividends)? If not, obviously I'd need to take that into account for the hedging. I've looked and I've found conflicting information. I know it is adjusted for special/surprise dividends tho. 2.) When using Black-Scholes to calculate the implied volatility for hedging is there any consensus on which option's implied volatility is best to use? Should I use the implied volatility from the option I will be using to hedge or should I do an average of implied volatilities or even use the VIX? If I just want to hedge for only a day would it make sense to use the implied volatility from an option with a closer expiration date that is at the money so that the implied volatility is less affected by the volatility smile? Thoughts? Thanks in advance.
[edited out typo] Thanks for the response. I'm trying to use CBOE's index options, specifically XSP which is SPX at 1/10 the value. So, that's why I want to know exactly what the S&P500 index does in regards to dividends. My question to you is which IV would you use? Theoretically, the IVs calculated from all of the options on the same underlying security with the same expiration dates ought to be the same, but they are not. Actually, what I'm trying to do is hedge my day trade. I'll have to look into Options Lab, previously I've just been using the CBOE's tools bc they're free and seem pretty good.