RepoToronto

Dreary Wrote:
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> In the real world, this is complete nonesense.
> Markets adjust the price of options whose
> underlying has a dividend coming up. You gain
> nothing by exercising and thinking you get the
> dividend. No such thing as a free lunch, CFAI.

That just means you are indifferent to early exercise or selling the option. There clearly exist options that need to be exercised early. For example, suppose you have an option on a $5 stock with a $5 dividend with a strike of $3. Whoever owns that option needs to exercise and get the dividend.