Cash dividends affect option prices through their effect on the underlying stock price. Because the stock price is expected to drop by the amount of the dividend on the ex-dividend date, high cash dividends imply lower call premiums and higher put premiums.
Source: Investopedia
Click the video below to see how I break this down for the class.
Follow me on Twitter @Cboesib
Ever wonder why option premiums rise before binary events in the stock market? It’s not uncommon for option prices to spike ahead of major announcements like: For context, I like to describe option premium as the difference between the contract’s price and intrinsic value. It’s essentially what buyers pay for the “hope” that an option […]
Read Article
When the markets move, the Delta Greek can be one of the most valuable metrics to options traders. There’s a particular correlation between the Delta Greek and options premium that can help traders find out how much the price of an option is expected to change. From my personal experience, I believe this pattern can […]
Read Article
Written By: Howard Greenberg As everyday traders put their trading plans into action for 2026, penny stocks might not be on many of their radars. It’s totally understandable why penny stocks may not appeal to the more calculated seasoned traders. Their reputations for susceptibility to manipulation, extreme volatility, and low liquidity make them way too […]
Read Article
Scott Bauer has had Amazon Inc. (AMZN) on his radar all week, and pulled the trigger on an AMZN earnings trade that paid off big time. On Wednesday, Scott laid out an example trade for AMZN on the Schwab Network — hours before they reported earnings: Amazon smashed earnings expectations, and made some wild moves […]
Read Article
Amazon Inc. (AMZN) reported earnings today and beat expectations. Both metrics smashed expectations for $1.63 EPS and $177 billion revenue. Scott Bauer had Amazon on his radar ahead of today’s report. He highlighted it this week on MarketMinds, and covered the stock on Sunday’s Weekly Earnings Prep. Today on the Schwab Network, he laid out […]
Read Article
Amazon stock has had a wild year. It’s up over 15% in 2026 — and nearly 31% in the last month! It’s one of five Mag 7 stocks that report earnings this week, and among four that reveal their quarterly results on Wednesday, April 29. Scott Bauer loves Amazon stock, and has it on his […]
Read ArticleWe choose to let our members and students speak for themselves. We do not actively solicit testimonials, no compensation has been paid for any testimonial, and testimonials are not necessarily representative of the experience of all students. All monetary claims made in testimonials that you see depicted in our marketing material have been verified by Prosper Trading Academy and attested to by the members that have given them. Verified testimonials encompass “experience” reviews that highlight the personal experiences of working with our team and “performance” testimonials where we verify trading success of students who have enrolled in our programs.Given the broad reach of the internet, testimonials and reviews of our programs that we have not been able to verify can be found on various websites across the internet which are beyond our editorial control. While we do very much enjoy hearing positive things from our students and it is critical to our mission that everyone is satisfied with their journey with Prosper, we encourage you to take both verified and unverified testimonials for what they are.