A Dividend Might Be Issued

One idea to use is to look at any dividends that a stock might pay out. One concern about options to see is that a person who holds an option will not receive any dividends off of the stock attached to it. What is more important is that the stock price will be reduced by the total value of the dividend that is given out. This might be useful for people who have put options, but it is not necessarily great for those with call options. A call option holder can always exercise the option before the ex-dividend date comes about to keep from bearing with the losses from the dividend being paid out. Even then, you have to watch for two things at that point:

1. Look at the potential for the dividend. Sometimes past dividend history might help you to understand what you might lose as the dividend is paid out.
2. Review how far in the money you might be. It might be best to keep your option running if you are in the money enough to where the loss from the dividend is not going to make much of an impact.

On a related note, you might be able to collect a dividend if you sell a call option and buy the stock. You will collect that dividend and then have the right to sell it later on. The added bonus you get off of the dividend might be worthwhile, but you should still look at how well the dividend is valued and if you can actually get a decent profit off of it.