Citi Dividend Optional?


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
Fast Money Final Call   

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.

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