Options Fun Fact: Why Dividents Hurt Call Buyers | #OptionsHandbook EP022
When earnings season ends, big companies start paying dividends. Shareholders are happy to collect cash—but Call option holders are not.🤔
📒 In The Options Handbook, here’s how it’s broken down:
▶ Calls Don’t Pay Dividends 💸
Owning a Call option doesn’t make you a shareholder, so you don’t receive the dividend payout.
▶ Ex-Dividend Day Drops The Stock Price 📉
On the ex-dividend date, the stock price usually falls by the dividend amount. That directly reduces the intrinsic value of Calls.
For Example, a Call worth $3 might drop to just $2 after ex-dividend. To avoid this, traders may either exercise early or skip buying Calls right before dividends.
▶ Why Tiger App Marks Dividend & Earnings Dates 📊
In the Tiger App option chain, earnings and dividend dates are highlighted—so traders can watch for added volatility.
If you trade dividend-heavy stocks, never ignore the impact of dividend yield.
▶ Summary
Dividends aren’t always good news. For Call buyers, ex-dividend day can feel like an “invisible markdown.”
🛒 The Options Handbook explains this and many other key insights into the options market. Now available in the Tiger Coin Center!
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- Hilliton324·2025-08-18Good to knowLikeReport