GameStop Corp. (NYSE:GME)

CAPS Rating: 1 out of 5

The Company is a retailer of video game products and PC entertainment software.

Recs

1
Player Avatar TrackMagicFormul (87.44) Submitted: 2/20/2013 1:26:52 PM : Outperform Start Price: $24.59 GME Score: +38.66

Investors should consider selling puts. You can achieve some very high annualized returns at strikes significantly below the current price. e.g.

Jan 14 $25 strike at $4.55 has 20% discount and 20% annualized return.

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Member Avatar ras151 (< 20) Submitted: 2/25/2013 3:02:41 PM
Recs: 0

Do you pay the dividend if you are short puts on dividend date?

Member Avatar TrackMagicFormul (87.44) Submitted: 2/27/2013 7:08:04 AM
Recs: 0

No, unless they are "special dividends", i.e. very large. If, say, GameStop decided to do a one-time special dividend of $2 just to return some cash to shareholders, then the CBOE would adjust their strikes to compensate. But, except for that, options pretty much ignore dividends.

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