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Corporate Actions: Cash Dividends

Managing a Position

Cash dividends may seem straightforward—but their impact on options contracts is more complex.

In this video, we explain how dividends influence options pricing, the role of models like Black-Scholes, and how OCC determines whether to adjust contracts.

(0:14) How Dividends Impact Option Prices
(0:45) Pricing Models and Dividends
(1:10) OCC Adjustments for Dividends
(1:26) When No Adjustments Are Made
(2:14) Adjustment Exceptions
(2:48) Example: 'Non-Ordinary' Cash Dividend (3:38) Example: Cash Deliverable Added

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