WCRX Warner Chilcott Special Dividend

[tradingjournals]

WCRX Warner Chilcott Special Dividend: I read it would be $8.50. I checked the option chains, and the options do not reflect it.

Could be that the special dividend is not $8.50, or that the dividend is not paid from cash, but rather a trade of some sort such as a borrowing to pay the dividend?

 

[xflat2186]

Always look it up with the OCC

http://www.optionsclearing.com/components/docs/market-data/infomemos/2010/aug/27621.pdf

 

[stoic]

Quote from tradingjournals:

WCRX Warner Chilcott Special Dividend: I read it would be $8.50. I checked the option chains, and the options do not reflect it.

Could be that the special dividend is not $8.50, or that the dividend is not paid from cash, but rather a trade of some sort such as a borrowing to pay the dividend?

The exdistribution date for this distribution will be Sept. 9, 2010

Strike prices will be reduced by 8.50

 

[spindr0]

Quote from tradingjournals:

WCRX Warner Chilcott Special Dividend: I read it would be $8.50. I checked the option chains, and the options do not reflect it.

Could be that the special dividend is not $8.50, or that the dividend is not paid from cash, but rather a trade of some sort such as a borrowing to pay the dividend?

Any chance that options aren't adjusted prior to the ex-div date?

 

[xflat2186]

Wonder how many threads there will be on this topic ans how many will say they got the div.

 

[tradingjournals]

Quote from stoic:

The exdistribution date for this distribution will be Sept. 9, 2010

Strike prices will be reduced by 8.50

Do you mean that the strike values will be reduced, or that the call price MINUS the put price will reflect the dividend? If you mean the latter, I checked the chain and it is the reason of my post because the difference is not a large number. If you mean the former, then could explain it in more details?

 

[donnap]

Quote from tradingjournals:

Do you mean that the strike values will be reduced, or that the call price MINUS the put price will reflect the dividend? If you mean the latter, I checked the chain and it is the reason of my post because the difference is not a large number. If you mean the former, then could explain it in more details?

It's the former. For example, the 25 strike will become the 16.50 strike.

Presumably, the stock price will also adjust down about 8.50.

 

[Moderate]

dammit =\

now this sucks

FUCK U WCRX

changing the strike price on options wtf

 

[stoic]

Quote from Moderate:

dammit =\

now this sucks

FUCK U WCRX

changing the strike price on options wtf

What's your problem, the stock will be reduced ex-distribution as well!!!

 

[joe4422]

You have to learn how options work. In any special circumstance, there is not one pre set way on how to adjust the options. There is a meeting held and a vote taken no what is the most fair adjustment to the options. In the case of a special dividend, the option prices will always be adjusted, this is nothing new.