We recently noted after Altria Group Inc. (NYSE: MO) raised its dividend that the dividend north of 7% would likely cause a huge dividend capture trading activity as te dividend date was before the expiration date of the September options. Our little belief ended up being the understatement of the year. Normally if you saw options activity like this, you would think that the stock was about to be acquired or that the company was going to get to start giving cigarettes out in machines at schools. That isn’t the case, but you will be amazed at the options trading in the SEPT-2009 CALLS:
Strike Volume  OpenInt.
$15.00Â Â Â 48,114Â Â Â 1,982
$16.00Â Â Â 112,109Â Â Â 4,495
$17.00Â Â Â 535,360Â Â Â 17,039
$18.00Â Â Â 664,058Â Â Â 21,031
The total volume in the stock today was a mere 23.3 million shares, still above the 16 million average. But the total leveraged amount of this if you just tallied up call volume would have been over 100 million shares… Don’t be fooled by that. This was a dividend capture trade.
Jon C. Ogg
September 10, 2009
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