Special Dividends and Duplicate Historical Option Listings
Summary
A special cash dividend or another corporate action can change an option contract’s deliverable. As a result, an adjusted, nonstandard contract may appear beside a newly issued standard contract with the same underlying, strike, expiration, and call or put designation. Their quoted prices therefore need not refer to equivalent contracts.
The practical guidance is to use the provider’s contract identifier or adjustment details to distinguish the listings, rather than treating one quote as the real price based on the displayed fields alone. The example shows duplicate WNR contracts with materially different quotes, but does not establish which row is standard or adjusted. The discussion gives no specific way to identify the correct row from price, volume, or open interest. Contract metadata and corporate action records are needed; the brief explanation does not cover every adjustment or provider convention.
Key ideas
- A special dividend can change an option contract’s deliverable and create an adjusted contract.
- Standard and adjusted options may coexist with matching displayed strikes and expirations.
- Use provider identifiers or contract adjustment details to distinguish otherwise similar listings.
- Quote fields alone in the example do not identify which option is standard.
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Full text
# I have some historical options data, and there are duplicates of some options, how to filter them # I have some historical options data, and there are duplicates of some options, how to filter them I have some historical EOD options data for 2013, and there are duplicates listed for same strikes/expirations. I was told that by the provider that this is due to "special one-time cash payout" for the company as opposed to a normal dividend, and this is how it is accounted for. My questions are - Can anyone explain what "special cash payout" means? - How can I tell which is the real option price? Example from 1/2/2013: ``` Underlying UnderlyingPrice Expiry Type Strike Last Bid Ask Volume OpenInterest Mark IV 1: WNR 28.94 20130119 C 30 0.85 1.05 1.10 7 1206 1.075 0.58 2: WNR 28.94 20130119 P 30 1.70 0.65 0.75 0 134 0.700 0.43 3: WNR 28.94 20130119 C 30 0.30 0.35 0.45 370 166 0.400 0.31 4: WNR 28.94 20130119 P 30 1.05 1.45 1.85 0 0 1.650 0.80 ``` ## Answer by chjortlund (score 1) https://quant.stackexchange.com/a/16009 When the underlying asset is a stock making this special dividend to its shareholders, it will influence the option. Special dividends is not that common, but usually happens in companies with extraordinarily success or under liquidation / sale of a division / splitting up. Look at Special Dividend on Wikipedia. ## Answer by Eli (score 0) https://quant.stackexchange.com/a/16955 When a company distributes a special dividend or there is other corporate action, it affects the deliverable of the option contracts. Thus, the option is adjusted and becomes special. For example, a standard option contract is on 100 shares of ABC. The company goes through a corporate action (including special dividends), and the deliverable now is 90 shares of the adjusted underlying share. Typically, new options with standard properties are issued around the corporate action date. They may trade for a certain period together with old (non-standard) options with the same strike, expiration, callput. Eventually, the non-standard options will be delisted and standard contracts will continue trading. A provider should give you some sort of identifier to distinguish between the old (non-standard) option and newly listed option.
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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.