so do the options get adjusted for every stock after a dividend? so lets say the day before the dividend of AGNC the stock closes at $30. Let's say to keep it simple I own the December $35 call option. Since this pays a dividend of $1.25 will that change the option to a strike of 33.75? I am just curious as to how this will work or if nothing will happen to my options at all and they would remain $35 strikes. Any info would be greatly appreciated.
>so do the options get adjusted for every stock after a dividend?
No. Periodic dividends are considered to be priced into the option when the series is opened. Special dividends announced after the options are being traded are commonly but not always adjusted. AGNC is treated as periodic even though it's announced differently every quarter.
Thank you for the good info. I appreciate it. I averaged in on the January 2014 $32 strike. I am in on 25 calls for an average of .40. I hope that works out for me. I am pretty sure even with the dividends and the share price going down over a year and a half I would hope it would get above 32.40.