Synthetic positions and dividends

Discussion in 'Options' started by KohPhiPhi, Oct 19, 2022.

  1. What about ShortCall + LongPut to capture the dividend twice! :)
    Of course opening the positions much before ex-div.
     
    #11     Oct 21, 2022
  2. KohPhiPhi

    KohPhiPhi

    Remember that the dividends (and interest rates) are already baked into the prices. So, you will receieve less money from your short call and you will pay more for your long put, and that net debit will be equal to the sum of dividend plus interest rates. In short: no arbitrage possible... That is, if I understood this whole put/call parity thing right :)
     
    Last edited: Oct 21, 2022
    #12     Oct 21, 2022
  3. That is one of the key principles of trading, yes. :)
     
    #13     Oct 21, 2022