lystn

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Do you get paid dividends with options?” The simple answer to this question is no. You do not get paid dividends with option contracts like you would normally in a scenario where you are long the underlying shares of stock. When you have ownership in a stock that pays dividends and you get through the dividend’s period and it goes X dividends and you actually get paid, that money comes right into your account. With an option contract, that doesn’t happen. It doesn’t matter if you’re long a call or a long put, short a call, short a put. That’s not going to happen with the option contract. However, the option contracts do account for dividend payments. Call option and put option contracts will adjust their pricing to reflect effectively the dividend payout that’s going to be coming down the line. You don’t have to worry about accounting for it. It is actually accounted for in the option pricing, so you can make those adjustments on your own if you need to. Hopefully this helps out. As always, if you guys have any questions, let us know and until next time, happy trading.