/biz/ - Business & Finance

Anonymous Sat Dec 26 12:39:18 2020 No.25182746 [View]
File: 36 KB, 809x465, Screenshot from 2020-12-26 12-33-15.png [View same] [iqdb] [saucenao] [google]

I'm taking the TD Ameritrade options trading course. There were only 2 questions on this quiz I got wrong. #1...

First I thought that high dividends would increase the price of calls and decrease the price of puts because there is higher risk of early assignment of calls and lower risk of early assignment on puts since people want to own the stock to get the dividend.

Second time I thought high dividend stocks usually crab and have low volatility so the premiums on both calls and puts would be lower.

Apparently this is the correct answer and it has something to do with the value falling after the dividend is issued.

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/biz/ - Business & Finance

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