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Does a Dividend Change How Options Are Priced? Chris and Liz Explain.
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ticker lesson
Breakdown
0:00lesson
Dividends and options pricing
- Dividends lower call prices, raise put prices
- Stock price drops $1 post-dividend
- Market prices reflect dividend timing
- In-the-money calls risk assignment
- Avoid short puts for dividend dates
1:30lesson
Implied volatility signals
- High IV on stagnant stocks = pending event
- Retail sales data drives IV spikes
- Drug trial outcomes inflate volatility
- Coiled spring = stored potential energy
- Avoid trading near expiration on volatile days
4:32lesson
Volatility patterns and trading
- Elevated IV precedes directional moves
- Short put spreads capture upside
- Short call spreads capture downside
- Avoid fading consolidation phases
- Define risk before entering volatile setups
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