Friday, September 11, 2009

RE: [TheOptionClub.com] Calendars and Dividends

 

I would be calling the customer service desk at your broker  to find out what the charge was actually for. There is no reason for you to have been charged the divvy [equivalent] on WMT if you held no short position in it (synthetic or not). There is another explanation for the charge. Either the charge was for something else and looks like it was for  the divvy, or your brokerage firm has charged your account in error. Option positions do not generate cash payments in lieu of dividends.  Unless they changed the rules and didn’t notify those of us who are Options and Securities Principals (I hold a Series 4 Options Principal and Series 24 General  Securities Principal license from FINRA for approximately 9 years now).

 

Ken

 

PS. Please let us know the outcome.

 

 

 

From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On Behalf Of drrobhansen
Sent: Friday, September 11, 2009 1:41 AM
To: OptionClub@yahoogroups.com
Subject: Re: [TheOptionClub.com] Calendars and Dividends

 

 

No, I checked and there was no assignment. In fact, none of the positions in the double calendar are in the money. I am short the Sep09_50put and short the Sep09_52.5call. I am long the corresponding October options. Maybe there is some synthetic component going on here? Anyone else have an explanation?

RFH

--- In OptionClub@yahoogroups.com, "Kenneth Ginsberg" <ken_ginsberg@...> wrote:
>
> If your ONLY WMT position is as stated, then something is wrong. The only
> way you should be debited the divvy is if you were actually short the stock
> itself. Have you checked to see if your short options had been exercised and
> you missed it and you are now short WMT instead of still in the spread?
>
>
>
> Ken
>
>
>
>
>
> From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
> Behalf Of drrobhansen
> Sent: Thursday, September 10, 2009 11:14 AM
> To: OptionClub@yahoogroups.com
> Subject: [TheOptionClub.com] Calendars and Dividends
>
>
>
>
>
> I'm in the process of learning how to successfully trade calendar spreads,
> and currently have a position in WMT. I'm short the Septembers and long the
> Octobers at the 50 and 52.5 strikes. I checked my account and noticed that
> my cash balance was debited yesterday for a dividend that Walmart paid. I
> was totally unaware that this type of spread was subjected to dividend
> payments. Could someone be kind enough to elaborate on how and why this
> happens?
>
> Thanks,
> RFH
>

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