Basics

Dividend

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Company earnings paid to shareholders

What is Dividend?

Dividend A distribution of a company's earnings to shareholders. Dividends affect options pricing because call values decrease and put values increase as the ex-dividend date approaches. Early assignment risk increases for in-the-money calls before ex-dividend dates.

Complete Definition

A distribution of a company's earnings to shareholders. Dividends affect options pricing because call values decrease and put values increase as the ex-dividend date approaches. Early assignment risk increases for in-the-money calls before ex-dividend dates.

Example

AAPL pays a $0.25 quarterly dividend. If you're short an ITM call before ex-div, you may face early assignment as the holder exercises to capture the dividend.

Related Terms

Assignment Call Option Intrinsic Value

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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