Bat the Mechanic

Evaluating Dividend Risk

Bat the Mechanic

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Looking at the price of the same strike put is a quick way to assess if your short calls are at risk of the dividend. If the put price is less than the dividend amount, you can repair the trade by rolling to extend duration or closing the trade.

For more information on Ex-Dividend check out this three part Market Measures series:

Part 1

Part 2

Part 3

Learn more about dividends here!

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