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Minyan Mailbag - MSFT follow-up



Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.


How will the Microsoft (MSFT:NASD) dividend affect the QQQ options? MSFT accounts for about 10% of the NASDAQ 100. Will the Cubes be impacted the same as Microsoft?

Minyan Steven Jesyk

Minyan Steven,

Good question. The QQQ options settle in cash. Since MSFT is 10% of the index, the QQQ calls will settle with $.30 cash included.

By the way, the OCC today determined to account for the special dividend in MSFT options by adjusting the strikes: a 25 strike essentially becomes a 22 strike. This of course is equivalent to paying cash of $3 inside the strike as described before.

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