Options and Dividends: When to Exercise

Exercising Call Options 4 Must-Own Dividend Stocks A common option strategy is buying options as an investment. By paying far less than the price of 100 shares, the call buyer gets to control those same 100 shares and possibly earn a substantial profit when the stock rallies. Similarly, the put buyer controls the right to sell 100 shares and can profit when the stock price declines. When the underlying stock pays a dividend, the option owner does not collect that dividend.  Indeed, most of the time the dividend is unimportant to the call owner. However, there are situations in which the call owner must pay careful attention to the dividend and especially to the date that the stock trades ex-dividend (without the dividend). Simply stated, if an investor does not already own the shares when the stock opens for trading on that ex-dividend date, the investor is not entitled to collect the dividend. If you own a call option, and if that option is in-the-money (ITM), you may want to exercise your right to buy 100 shares at the strike price, take ownership of the shares and collect the dividend. However, the decision is not always obvious, and this article is meant to help reach the best decision.
Negocioenlinea
tdp2664
gol2664
InvestorPlace