Dividends can potentially impact option prices in the following ways:

Call Options:

• When a company pays out a dividend, the stock price typically drops by the amount of the dividend on the ex-dividend date. This drop reflects the reduction in the company's assets due to the dividend payout.
• Call options give the holder the right to buy the underlying stock. If the stock price drops due to a dividend payment, the value of the call option may decrease because the difference between the strike price and the lower stock price is reduced. This can lead to a decrease in the call option price.
  

Put Options:

• If the stock price drops due to a dividend payment, the value of the put option may increase because the difference between the strike price and the lower stock price is increased. This can lead to an increase in the put option price.

For further details on option trading at Alpaca, please navigate to our documentation.

For further educational information on Options trading, please refer to: https://www.optionseducation.org/

Options trading is not suitable for all investors due to its inherent high risk, which can potentially result in significant losses. Please read Characteristics and Risks of Standardized Options before investing in options.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is no guarantee that any investment strategy will achieve its objectives. Please note that diversification does not assure a profit, or protect against loss. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.