Only when a special dividend is above 10% of stock price, then the option's strike price will be lowered etc. But say we have XYZ with a stock price of $50, giving out a $2.5 dividend to shareholders tomorrow. We could buy the puts at $50, and sell after the dividend gap tomorrow. Now, I know probably hundreds of thousands of people have thought of this so what don't I see? Thanks in advance for any helpful replies...
This topic was discussed..you might find good info here http://www.thinkorswim.com/tos/disp...1436FC6E1061C867AEF0C64?webpage=onlineSeminar March 22 the topic was special dividends and why you really cannot make money on the options of stocks issuing special div