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eri***net

09/15/2020 18:20

$VERSO for anyone confused, here is a historical example of another company that had a special dividend (of $12). you should fully expect a drop in price of $3 here, just like $$Nortonlifelock dropped by 12. unlike normal dividends... option strike prices will automatically adjusted as well! by default, WB does not adjust charting for special dividends, but ToS does. go into your chart settings, equities tab.

what happens after that, is speculation. but, at least understand the basics. for a moment, you must expect that you are simply trading your stock value for a SPECIAL dividend payment.
VERSO-0
Disclaimer: The comments, opinions and analysis expressed herein are for informational and educational purposes only and shoulk not be considered as individual investment advice or recommendations. Webull is not responsible or liable in any way for comments posted by pur users.

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All Comments(10)

I-requirecom09/16/2020 00:05
On the 17th it wil trade without the dividend so it will drop by that amount
Hoping it then recovers on 9/18 and beyond

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Julianadfit09/15/2020 20:54
Dont borther explaining. I tried. some of these idiots dont understand.

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eri***net09/15/2020 19:45
I'm not giving advise, just my opinion based on my understanding. see the link ive provided in the comments, on how special dividends impact options.

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WeBear09/15/2020 19:31
what exactly do you mean the option prices will adjust?

eri***net09/15/2020 19:43

for example, if you buy a 15 strike contract today, the strike price will be reduced by the special dividend amount, on the ex-div date, becoming 12. or, if you buy a cheap 12.5 OTM put thinking you gonna get rich, it will become 9. this is unlike "normal" dividends. "no free lunches" was something i read in another article, lol.

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Jet***com09/15/2020 19:03
So we should buy a put to hedge with? 15 dollar 10/16 looks good

eri***net09/15/2020 20:08

assuming it closes at 14.50 tomorrow, I honestly, im more inclinded to buy a octq6/15c (that becomes 12) because i think the price rebounds from the drop on thurs into Friday. but I wouldn't touch the sep option.

eri***net09/15/2020 19:35

I honestly don't know. the oct 16/15 would also adjust to 12 (if i understand). then, it was 12.50 at dividend announcment. does that mean "fair" is 12.50 - 3 = 9.50? that would indicate the recent run up was simply anticipation of dividend... or is it because earnings were good, in which case current price 14.5 - 3 = 11.50 is fair. but this doesn't account for the buyback - which might offsets the 25% dividend and keeps the price 12.50 - 14.50. this is where I overthink. so, I dont know.

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eri***net09/15/2020 18:46
I'm not making a prediction here, ive just seen people saying this is "free money". lol, its not. we can speculate on where it will go, but we're doing so from the theory of where it *should* adjust to (if only for a fraction of a second).

factors like the buyback, are a perfect example how it adjusts from the basic $3 drop.

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Lyle Henderson09/15/2020 18:41
I dont see this falling the full 3

tat***com09/16/2020 03:25

I think you're putting a smartly thinking on what to do next with no emotions involved here. would you please let me know what you'll do once you clear up your debatable thinkings

Chr***com09/16/2020 02:15

Might keep an eye on this one, looks interesting.

View all 4 replies

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21s***com09/15/2020 18:34
so the 15 call will be 11.9?

PennyBoi09/15/2020 19:32

The strike means nothing. Does the BEP also drop?

eri***net09/15/2020 18:50

...and for clarify. if you buy a $15 strike contract right now and hold it, it will adjust to 12 strike on thursday.

View all 6 replies

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Lyle Henderson09/15/2020 18:34
This isnt even close to the top

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I'veGotTime09/15/2020 18:29
Well yes.. but before it falls, it needs to hit the top first. And this isn't the top

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