Dividend Cuts Implied By The Options Market

[destriero]

Market is pricing in a $0.50 cut to T's div as well. I think it will be a buck or more or mass divestitures to keep the div safe.

 

[Matt_ORATS]

Market is pricing in a $0.50 cut to T's div as well. I think it will be a buck or more or mass divestitures to keep the div safe.

Dest
Yes, that is what I see as well:
annActDiv annIdiv
$2.08 $1.53
From our API:
annActDiv is the forecast of the next year of dividends actual.
annIdiv is the implied dividend for the year from options prices.

 

[destriero]

Dest
Yes, that is what I see as well:
annActDiv annIdiv
$2.08 $1.53
From our API:
annActDiv is the forecast of the next year of dividends actual.
annIdiv is the implied dividend for the year from options prices.

I thot you were going to call me out as I didn't have any 6mo or 12mo tenors to calc it in my head and assumed I was off a bit.

My wife is a VP at T and taking early retirement this month. "How can you possibly know this?" Ah ha, it's magic, Hon.

 

[Matt_ORATS]

I thot you were going to call me out as I didn't have any 6mo or 12mo tenors to calc it in my head and assumed I was off a bit.

My wife is a VP at T and taking early retirement this month. "How can you possibly know this?" Ah ha, it's magic, Hon.

Ha. The options people know before the company does.
Here's today's list:

 

[Matt_ORATS]

Here are today's:

 

[ironchef]

Today's dividend cuts implied by the options markets includes two builders, Lennar & Pulte. Royal Caribbean Cruises is still expected to cut. Ross Stores and the Retail SPDR expect lower dividends too.

Questions:

1. BMY dividend is $1.8, quarterly should be $.45 yet implied is $.33? Since BMY dividend is very safe why is implied at such a deep discount? There must be some discounts (time value...) factored into the implied?

2. If I am very confident of $.45, is there a play here?

Thanks.

 

[Matt_ORATS]

Questions:

1. BMY dividend is $1.8, quarterly should be $.45 yet implied is $.33? Since BMY dividend is very safe why is implied at such a deep discount? There must be some discounts (time value...) factored into the implied?

2. If I am very confident of $.45, is there a play here?

Thanks.

1. When we took this snapshot of markets there may have been an anomaly because currently the implied dividend is back to near normal. We account for time value and discounts.
2. There can be a trade if you have a different outlook than the options market. However, like I said the overlay is gone now.