Taxing Dividends on Option Prices?

Discussion in 'Options' started by blueraincap, Aug 17, 2022.

  1. We learn that dividends can be modelled continuously or discretely to decrease the spot price. But how much empirically do the forward stock prices drop by the dividends on ex-date? I mean how about dividend tax?

    If I am to own a stock at $100 paying $5 dividend this week, assuming no-vol and ignoring interest rate blah blah, the 1-wk forward price is $95, but I only get $3.5 after 30% withholding tax. I am thinking how to capture the dividend using options, to minimise the impact of dividend withholding tax, whilst willing to take on additional option risks.