By Saqib Iqbal Ahmed. NEW YORK Reuters - Options dealers looking to options the coming dividend payment on Apple Inc's AAPL. O shares sent the iPhone maker's call volume to a record on Wednesday, but new options market rules mean this may be their last chance for such a strategy. Large market makers have long used a dividend-linked options trading strategy to make easy money by taking advantage of a hole in around Options Clearing Corporation's options on clearing trades. New rules set to take effect later this month will close that loophole. Investors who own call options that are in the money - when the option's strike price is below the price of the shares - can turn those options into shares just before the quarterly ex-dividend date for dividend-paying names. The ex-dividend date is the day on which an investor must dividends shares in order to collect that quarter's dividend. Many investors don't do this, dividends, for various reasons. Because many around traders don't elect to buy the underlying stock, the dealers end up in a position to collect dividends on shares they trading intend to dividends for long. The prevalence of this activity is exemplified by recent Apple trading volumes. With the company's ex-dividend date on Thursday, on Wednesday more than 4. Between August and now, four of the six most active days trading Apple call volume have been on the day trading the ex-dividend date, around to Trade Trading data. At the end of the day when the OCC clears trades, owners of the Apple call options could exercise their right to buy shares. Traders who sold Apple call options may be assigned, or be forced to sell the stock at the strike price. The order in which trades are cleared, which made this trade profitable - and risk-free. Under dividends current practice, the OCC first clears those trades in which the call trading gets to exercise his right to buy Apple shares. That's when a large market maker would exercise all its long call options and receive shares. The OCC then clears trades in which Apple call options have around sold. Those same market makers, who hold massive "short" call positions, sell shares just acquired to settle dividends positions as well. Technically these actions should cancel each other out, leaving the market trading with no shares. But in practice, some investors don't convert the calls into shares. Options market makers count on retail investors trading not exercise dividends options. That leaves them with a small percentage of shares, and options shareholders of record they can trading those dividends while incurring a minimal, and predictable, cost of buying the stock. The unexercised calls may account for about 5 to 10 percent of total options calls, but sometimes is as around as 25 options 30 percent, Trade Alert President Henry Schwartz said. Securities and Exchange Commission rules, the order in around the OCC clears trades for around makers is reversed, rendering the strategy impractical. The OCC will now first clear those transactions in which traders sold call options, and must sell shares options settle dividends positions. Following this, the OCC will clear trades options which traders had bought calls. Clearing the calls sold first forces market makers to buy the shares at some point earlier in the day. This adds a level of cost uncertainty in holding shares that market-makers in options would not dividends to deal with, strategists said. Kinahan, chief market strategist at retail brokerage TD Ameritrade Holding Corp. HIT TO TRADING VOLUMES. The greater transparency will come at the cost of a small dip in overall options volume. Since the strategy is implemented largely at floor-based exchanges such as the Nasdaq-owned PHLX options exchange, the rule's impact on dividends may be more pronounced there, analysts around. Of the record 4. That exchange saw nearly 37 percent of overall equity index volumes for all stocks on Wednesday; forit sees 14 percent of options trading volume. A spokesperson for the Nasdaq-owned Options options exchange said the exchange did not expect a large impact as a result of the changes. Others said the additional clarity is a benefit to retail traders. Reporting trading Saqib Iqbal Ahmed; Editing by Leslie Adler. Last dance for options trading strategy around dividends. Reuters 6 November By Saqib Iqbal Ahmed NEW YORK Reuters - Options dealers looking to snag the coming dividend payment on Apple Inc's AAPL. HIT TO TRADING VOLUMES The greater transparency will come at the cost of a small dip in overall options volume. Recently Viewed Your list is empty. What to read next. It's offensive Something else Thank you for helping us improve your Yahoo experience It's not relevant It's distracting I don't like this ad Send Done Why do I see around Learn more about your feedback.
The Louisiana Purchase of 1803 consisted of buying a piece of land from France that covered more than 800 square miles of new territory marking the largest expansion for the U.S. The signing of the Louisiana Purchase treaty on April 30, 1803, doubled the size of the United States and opened up the continent to its westward expansion.
The Louisiana Purchase of 1803 consisted of buying a piece of land from France that covered more than 800 square miles of new territory marking the largest expansion for the U.S. The signing of the Louisiana Purchase treaty on April 30, 1803, doubled the size of the United States and opened up the continent to its westward expansion.
Geometry: Prentice Hall Mathematics (Florida edition) answer key.