Schaeffer's Daily Option Blog: American Express Co. Call Volume Spikes Ahead of Ex-Dividend Date
CINCINNATI-(Business Wire)-September 29, 2009 - American Express Co. (NYSE: AXP) is being drowned in a deluge of call volume this afternoon. Some 107,000 contracts have traded on the stock's October 25 call, which currently sports open interest of just 9,612 contracts. What's more, nearly all of this volume has changed hands at the bid price, indicating that these calls were sold to open.
Drilling down on AXP's October 25 call, two blocks of 25,000 contracts traded for the bid price of $9.20, or $920 per contract, on the Philadelphia Stock Exchange (PHLX)at about 2:20 p.m. While the trader received a hefty premium for selling these deep in-the-money calls, the main objective for this particular trade was likely to capture dividend. Specifically, AXP is slated to go ex-dividend tomorrow. For the record, traders who purchase a stock after the ex-dividend date are not entitled to any dividend the company is scheduled to pay out.
To continue reading this article, click here: http://www.schaeffersresearch.com/marketcenters/optionscenter/default.aspx?id=95442&source=businesswire
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