Apple special dividend in 2018?

[ajacobson]

What are folks thoughts ? Think we'll see one. It would really disrupt the options market.

 

[Robert Morse]

It would really disrupt the options market.

Why would it do that? Any non-regular dividend are adjusted with the options by the OCC.

 

[truetype]

Well, it would zero out any puts with strikes of less than the dividend adjustment...

 

[traderlux]

good point, even regular dividends can disrupt option trades if you are not careful,

 

[SoesWasBetter]

Well, it would zero out any puts with strikes of less than the dividend adjustment...

Wouldn't those puts already be near worthless?

 

[jharmon]

Any special dividends (well anything > 10% of the closing price of a stock) will adjust the contract terms. Nothing to see - move along.

 

[truetype]

Wouldn't those puts already be near worthless?

Yes, in the case of a (relatively) low-vol stock like AAPL. But for SHLD... the Jan 2019 $3 put is currently $1.55, with SHLD at $3.62. If (by some miracle) Eddie paid a $3 special dividend, it would erase those puts.

 

[SoesWasBetter]

Yes, in the case of a (relatively) low-vol stock like AAPL. But for SHLD... the Jan 2019 $3 put is currently $1.55, with SHLD at $3.62. If (by some miracle) Eddie paid a $3 special dividend, it would erase those puts.

Any example like that? chance of shld paying $3 is
0.0000000000000000000000000000000000000000000000000000000000000000

bette come up with something better

 

[sle]

Any example like that?

DRYS

 

[jharmon]

don't trade illiquid crap