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Option Prices and ETF Distributions

Kwmi

By Kwmi
in General Board

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Kwmi Newbie

Kwmi

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ETFs seem to make distributions in December and I can't find any information as to how this impacts option prices.  I know that for an expected or standard cash dividend it is baked into the price of the option, but with ETF distributions it is uncertain what the distribution amount is going to be.  I don't think the option prices are adjusted by the exchange, so what is priced in?  I feel like I should not be buying some of these OTM calls when these distributions are looming.  Please help me understand!

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