GO
Loading...

Citi Dividend Optional?

Thursday, 3 Jan 2008 | 4:01 PM ET


The options market provides perhaps the best window into the future for the broader stock market and right now it’s painting a bleak picture for Citigroup investors.

Fast Money Final Call
Eyeing the dividend option, with Jon Najarian, OptionMonster.com co-founder and CNBC's Dylan Ratigan

Options futures are predicting that Citi’s dividend could be reduced dramatically, Jon Najarian said on Thursday’s Closing Bell, possibly even down to 25 cents in a bid to preserve capital.

Options have several input variables that determine their price: the time until expiration, interest rates, the striking price and the dividend. If one of those variables changes, the price will change as a result, Najarian said. With Citi, every variable but the dividend is known – so the price is in question so long as people are betting that the dividend will drop.

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to fastmoney@cnbc.com.

  Price   Change %Change
C
---

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report

  • Jay Yarow, The Business Insider, and Steve Milunovich, UBS, discuss whether Tim Cook is to blame for Apple's drop in growth. I think it's pretty clear they missed the big phone market and overestimated the success of the plastic 5C phone, says Milunovich.

  • CNBC's Eamon Javers reports on Bill Ackman's stake in Allergan. Javers says this is a classic case of insider trading that is not against the rules.

  • FMHR trader Josh Brown thinks Dunkin' Brands looks fantastic technically, while Mike Murphy says investors are questioning the company's massive expansion plans.