Using Option Prices to Estimate Dividends

Discussion in 'Education, Tutorials & Courses' started by FXStreet_Team, Dec 22, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    There are some fascinating mathematics behind options. If you just read that sentence and don’t see how “fascinating” and “mathematics” could ever go together, then options are probably not for you. Otherwise, read on. One of those interesting properties of options is the way they relate stock prices, interest and dividends. If we know the prices for options on a stock, we can estimate from those prices what the next dividend payment is likely to be. This is not due to any mystical power of

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