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What happens to option pricing (not the call/put options - but the ones listed on ASX linked with shares) in the lead up to the company paying a dividend??
In the lead up to healthy dividends, share prices often increase as people seek to benefit from receiving the dividend. However I assume option holders don't get the dividend so does the option price rise with the share price or does it factor in the subsequent fall when they go ex-div
For example if share price is currently $1.10 and options (say ex @ $1.00) are $0.12, if shares typically rise before div payment - say a 10 cent div taking them to 1.20 - will the options rise 10 cents as well - say to $.22 - or will they factor in the subsequent ex-div fall?
The only options I have bought have been on non-div paying mining stocks - does anyone have an example of options of div paying stocks?
thanks in advance...
In the lead up to healthy dividends, share prices often increase as people seek to benefit from receiving the dividend. However I assume option holders don't get the dividend so does the option price rise with the share price or does it factor in the subsequent fall when they go ex-div
For example if share price is currently $1.10 and options (say ex @ $1.00) are $0.12, if shares typically rise before div payment - say a 10 cent div taking them to 1.20 - will the options rise 10 cents as well - say to $.22 - or will they factor in the subsequent ex-div fall?
The only options I have bought have been on non-div paying mining stocks - does anyone have an example of options of div paying stocks?
thanks in advance...