Ex Dividend status, how does it affect options price?

[greybox]

If dividends are priced into equities - how does an ex dividend status affect options prices - if indeed it does?

 

[Profitaker]

If dividends are priced into equities - how does an ex dividend status affect options prices - if indeed it does?

In what way do you mean "affect" ?

Options are priced according to the forward value of the unerlying at expiry. Forward value = spot + cost of carry - divs, and so the dividend is discounted in the option. Remember also that american style option cannot trade for less than intrinsic.