Nonetheless, for account holders who have the capacity to meet an increased capital or borrowing requirement and potentially greater downside market risk, it can be economically beneficial to request early exercise of an American Style call option in order to capture an upcoming dividend. Barraclough and Whaley show that more than 3. Contracts For Difference are much more attractive for me. Why do investors give up this money? The costs of learning the early exercise decision rule and constantly monitoring open put-option positions may be too high relative to the perceived benefits. All other things being equal, the price of the stock should decline by an amount equal to the dividend on the Ex-Dividend date. Marcus Holland Very interesting article and pretty much explains why options are an inferior trading derivative.
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Options Expiration & Assignment
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