If options expire on ex-div date?

Discussion in 'Options' started by 1a2b3cppp, Sep 14, 2012.

  1. I have a covered call position with a 9/21 option on SPY.

    The ex-div date is also on 9/21.

    Am I going to get the dividend as long as my option isn't called away before then? If so, what are the chances of that happening?
  2. My experience is that if you still own the stock on the morning of the ex-div date, you will get the dividend.
  3. You will get the dividend if you aren't exercised. Odds are that if the option is in the money by more than the dividend you will get exercised.
  4. :D :D :D
  5. Some might say that the trade here is those odds specifically :)
  6. Thanks.
  7. You really won't know until Monday since they "can" early exercise, or they can simply wait for auto expiration. Early exercise, you may pay, of course.

    All the best,

  8. the point here is that the dude on the long endcould be a moron if he does not exercise when itm & div > extrinsic.
  9. I would choose to word it differently, but you're exactly right, LOL.

  10. sle


    Yes, that bit has been called "statistical arbitrage" by some...
    #10     Sep 19, 2012