Ordinary vs Non-Ordinary Dividend Adjustments

Corporate Actions: Bankruptcies

Bankruptcy can significantly impact both a company’s stock and its associated option contracts.

Corporate Actions: Cash Dividends

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.

Corporate Actions: Forward Splits

A forward stock split increases the number of outstanding shares while reducing the price per share proportionally - but what does this mean for option holders?

Corporate Actions: Reverse Stock Splits

A reverse stock split reduces the number of a company’s outstanding shares while increasing the share price proportionally—but what does this mean for option holders?

Options FAQ: Are there exercise restrictions when there is a corporate action?

When corporate actions occur, many investors wonder whether there will be any exercise restrictions for their options.

Options FAQ: How might corporate actions impact options?

Did you know that corporate actions like stock splits, mergers, acquisitions, and special dividends, among others, can change the terms of your options contract?

What Are Corporate Actions?

How Interest Rates and Dividends Shift Parity

Real examples showing how changing interest rate assumptions (4.32% vs 8.32%) create different forward prices even with identical strikes and stock prices. See how dividend timing affects call and put pricing.

Dividend Considerations for Option Traders

Review possible ways dividend payments affect exercise decisions and the importance of becoming a shareholder before the ex-dividend date.