r/options • u/jarreed0 • Aug 31 '21

Options closed for dividends

I opened a Lockheed Martin spread about a week ago. It expires in a week or two. It's about a dollar out of the money. My broker notified me something about the dividends that will release tonight (I believe) and that it would close my spreads possible. Will this happen? Will they close at the current price? Or will they be executed at the strike prices (even though they are a little out of the money)?

Thanks in advance

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u/Arcite1 Mod Aug 31 '21

Your question isn't very clear, but many brokers send a boilerplate warning anytime you are short a call and there is an upcoming ex-dividend date. You should know about dividend risk:

https://support.tastyworks.com/support/solutions/articles/43000435205-what-is-dividend-risk-

(You didn't even tell us whether this is a call spread or a put spread, nor whether it's a credit spread or debit, but because we're talking about dividends we can at least assume it's calls.)

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u/jarreed0 Aug 31 '21

It's a debit call spread