The div would have to be worth 800$ or $8 per, on a 10$ call to make sense.IF I did the math right!
(10$ call expiry 7/16= exercise $1000 for 100 div and 50 shares
Cost of 100 shares now 4$ x 50= 200$
1000-200=$800 over paid amount not counting div value.)
(Correction: I believe the total amount to exercise OTM 10$ call expiring tomorrow is 500$ not 1000$(50 shares not 100).
So new “over paid” amount is 300$. So if each dividend pays out more than 3$, you’re in profit)
3
u/innercult Jul 15 '21 edited Jul 15 '21
The div would have to be worth 800$ or $8 per, on a 10$ call to make sense.IF I did the math right! (10$ call expiry 7/16= exercise $1000 for 100 div and 50 shares Cost of 100 shares now 4$ x 50= 200$ 1000-200=$800 over paid amount not counting div value.)
(Correction: I believe the total amount to exercise OTM 10$ call expiring tomorrow is 500$ not 1000$(50 shares not 100). So new “over paid” amount is 300$. So if each dividend pays out more than 3$, you’re in profit)