I have a dividend on stock symbol PM going Ex on March 20 with dividend of 1.35. Lets see if its called away today as others are afraid of. I have a 152.5 covered call with the March 21 expiration and the call sell was on1.97 on March 10 when I did the trade. Also bought a 152.5 put for $4.03. If the trade doesn't work out I will admit my error.
have a dividend on stock symbol PM going Ex on March 20 with dividend of 1.35. Lets see if its called away today as others are afraid of. I have a 152.5 covered call with the March 21 expiration and the call sell was on1.97 on March 10 when I did the trade. Also bought a 152.5 put for $4.03. If the trade doesn't work out I will admit my error.
if you're beating the implied conversion market then you did better than the market on execution. this is the most common of arbs. Ask yourself why thge put is trading at 1.8 with the call at 0.98.
I dont question the reason why a call or put is trading at the prices. I only look at the result if I trade it. I am not a psychic so I cant figure out the reason behind the thousands of trade prices .
You’ve been given the tools to understand it. If after studying it you have questions feel free to post them. If you buy an options book you won’t have to read past chapter 2
My PM stock was not assigned despite going ex tomorrow. My trade as all of them are riskless and now I get the dividend too
Stock not assigned due to my strategy of buying OTM CC at good price. I will now get the 1.35 dividend
you will find out tomorrow if you will get the dividend. They have until 16:30EST to submit instructions and it will process overnight. However, i think you are likely to be in the clear. I give you a 75% chance of being okay. if the stock had rallied 2 dollars more, you would be SOL.
it looks like the stock was trading >151 when you went long. I know that you shorted it at 150.44. Your error is not understanding parity. long put - call = short stock. you shorted stock < you bought it. I'm not going to get into net of the dividend but it was not worth the effort.