If somebody tell you in the face that certain stock or instrument will go up or down with absolute certainty, then I can safely conclude that either he/she was telling you outright lie or he/she was involved in illegal price fixing or insider trading activity. Nobody ever can predict exactly the price movement of certain instrument in the open market. Simply cannot. Here is why…

If you are doing regular covered call / share renting / buy write strategy then sooner or later you will meet the condition that the stock that being optioned is giving shareholder some dividend. And there are some interesting interaction or behavior that you need to realize during this period. Knowing this little detail will help you adjust your strategy to maximize your profit.

As investor, you will find out that dividend is one of income stream on your investing portfolio. The higher the dividend, the happier is the investor. But for trader, especially short term trader and call-option writer, there is more factor to be factored-in in order to maximize the profit or prevent lost. Why? That’s because of the typical behavior of the stock price during the “Ex-Dividend Date”.