Scalping The Costco special dividend with a collar

B

Bekim

Anyone with experience in this? I have never done it before. How would you go about doing it? When is the latest date you would put the trade on. Is this a good idea or a bad idea? Just wanted to get anyone's opinion who has experience in this. thanks
 
FSU said:
No this is not a good idea. The options will be adjusted after the dividend. Basically your strike price will be reduced by 10. There is no magic way to make free money.

Here is the OCC memo
https://infomemo.theocc.com/infomemos?number=47876
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So you are saying buying the near the money put and selling the near they money call. Will not offset this? It looks that it will, I am just trying to figure out what I am doing wrong. How do they typically adjust the options in this circumstance
 
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