Deep ITM Call Writing for Dividend Capture

Quote from xflat2186:

you can’t buy and sell the same option to yourself.
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You need to find a trading partner to cross them. It's actually pretty easy. It even has a name - "the Cap Strategy."

Ask any reputable broker and they will tell you about it; and will take the other side for you (i.e. they are the "trading partner").

Def true that it's not a great strategy anymore.

Under no circumstances do I recommend it.
 
Quote from DeltaSpread:

If you have a high quality dividend paying stock trading below $20 range. And you wrote one year out $2.50 strike calls against it. And did NOT leg in, rather purchased a spread for a debit of say $2.60. Would those shares just get immediately called back from you. What are the chances of you holding on to them for the duration??
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I must be fried from a really hectc day cuz I'm missing something. This is a deep ITM write against long stock placed as a net buy/wite order (what you call a spread) ? The $2.60 is the net cost of the CC?
 
Let me help you... The chances of not being assigned on a call like that when there is a significant dividend in play are very near zero
 
Quote from xflat2186:

Let me help you... The chances of not being assigned on a call like that when there is a significant dividend in play are very near zero
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If this reply was for me, my question was about what the components of the position were not what happens later. If not for me, I'll wait for another reply.

(sitting here drumming fingers) :)
 
Quote from spindr0:

If this reply was for me, my question was about what the components of the position were not what happens later. If not for me, I'll wait for another reply.

(sitting here drumming fingers) :)
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Yea spin, I always correct all your mistakes because you clearly know nothing about derivatives and I am here to school you. LOL
 
Quote from livevol_ophir:

Buy and sell the option at the same time at the same price (called crossing) on the day before ex.

A rule allows you to exercise an option even if you sold it later as long as it's all the same day. You hope you don't get exercised on your short, then you gain the divi in entirety.
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what rule is this? Hard to imagine any retail firm allowing clients to do this, especially an online firm? If one could do this, is the dividend not factored in to the price of the option?
 
Quote from xflat2186:

Yea spin, I always correct all your mistakes because you clearly know nothing about derivatives and I am here to school you. LOL
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I'm glad that I've given you purpose for your time spent on Elite Trader

:D :p
 
Quote from spindr0:

I must be fried from a really hectc day cuz I'm missing something. This is a deep ITM write against long stock placed as a net buy/wite order (what you call a spread) ? The $2.60 is the net cost of the CC?
More...

$2.60 is the total out of pocket cost for 100 shares - 1 call option $2.50 strike.

So you buy 100 shares of stock X for $17.25
And sell $2.50 call strikes against it.

If you do this simultaneously, i.e. not legging in, you will have to pay more than the break even $2.50 price point.
 
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