EFP AUG08 Futures HBC1CQ8 Bid 20.200% HBC AUG08 Futures HBC1CQ8 Bid 81.14 HBC Stock Ask 81.85 Ex-div date is 20 Aug, future expires 15 Aug. So by selling the EFP for income one would buy 100 stock for 81.85, then sell them in the future for 81.14 and NOT receive the expected 0.90 dividend. Just wondering how this should make 20% yearly interest. Perhaps for the buyer side! Please tell me I've got it wrong.
Yeah, you got it wrong. The stock is delivered at future exiry. Focus only on what you receive/pay for the EFP and dividends while holding the stock.
The raw EFP bid price was probably somewhere around -0.20. So how does that make the above equation profitable to me? I really don't get it.