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A stock at $\$100$ goes ex a $\$3$ dividend tomorrow. You hold an American $\$80$ call whose value after the ex-date will be its intrinsic value plus $\$0.50$ of time value. How much better off are you exercising today rather than holding?

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Borrow, dividends and what happens at expiry

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Optiver, SIG (Susquehanna)

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A stock at $100 goes ex a $3 dividend tomorrow. · QuantMax

A stock at $100\$100$100 goes ex a $3\$3$3 dividend tomorrow. You hold an American $80\$80$80 call whose value after the ex-date will be its intrinsic value plus $0.50\$0.50$0.50 of time value. How much better off are you exercising today rather than holding?

More options: fundamentals and arbitrage questions

A stock at $\$100$ goes ex a $\$3$ dividend tomorrow. You hold an American $\$80$ call whose value after the ex-date will be its intrinsic value plus $\$0.50$ of time value. How much better off are you exercising today rather than holding?