LD Lossdog Research
symbol

CLX

4 matching records.

Trade idea

CLX iron condor

The speaker is short an iron condor on Clorox (CLX) and is concerned about the potential for early exercise of out-of-the-money calls due to an upcoming dividend. The discussion clarifies that early exercise of out-of-the-money options is not typically done for dividend purposes, and the email was a general alert to all holders of options on Clorox with an upcoming dividend. The speaker is advised that there is no risk of assignment for out-of-the-money options, and the email was sent as a precautionary measure.

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Strategyiron condor
Assetequity
Time horizonshort-term
Entry / triggerdividend announcement
Invalidation / stopdividend date
SpeakerTJ
Risks
  • Dividend risk
  • Market volatility
  • Early exercise risk
shortequityshortiron condorCLXshort-term
medium confidenceVerify in video at 54:17 ↗
Trade idea

CLX Short Call with Dividend Consideration

The trader is short a 110 call on CLX, which is trading at 109.67. The corresponding 110 put is at 39.04, which is significantly above the dividend of 1.24. The trader is considering the risk of assignment and the mechanics of short call positions. The trader is advised that rolling the position to a 21-day expiration reduces the risk of assignment, as it is rare to be assigned on short calls with 21 days to expiration. The trader is also advised that if the put is close to the dividend value, the position should be exited to avoid risk.

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StrategyShort Call with Dividend Consideration
AssetEquity
Expiration21 Days to Expiration
Time horizonShort-term, with a focus on the 21-day expiration
Entry / triggerStock price at 109.67, 110 Call at 4.30, 110 Put at 39.04
Target / exitNot explicitly stated, but the trader is considering rolling the position
Invalidation / stopIf the put is below the dividend value (1.24), the position should be exited
SpeakerTJ
Structure / legs
  • 110 Call
Risks
  • Risk of assignment if the put is close to the dividend value
  • Market volatility could affect the put and call prices
Short CallequityCLX
high confidenceVerify in video at 55:49 ↗
Q&A

Why would someone want to exercise an out-of-the-money call early if it's not in the money?

The speaker explains that it is not typical to exercise an out-of-the-money call early for dividend purposes. The email was a general alert to all holders of options on Clorox with an upcoming dividend, regardless of whether the options were in or out of the money. The speaker clarifies that early exercise of out-of-the-money options is not a common practice, and the email was sent as a precautionary measure.

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Actionable takeawayEarly exercise of out-of-the-money options for dividend purposes is not a standard practice, and such emails are typically sent as a general alert to all holders of options on a stock with an upcoming dividend.
CLXOptions
high confidenceVerify in video at 54:26 ↗
Q&A

What is the dividend for CLX?

The dividend for CLX is $1.24.

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Actionable takeawayThe dividend amount is a key factor in determining the risk of assignment for short call positions.
equityCLX
high confidenceVerify in video at 55:58 ↗