How might this dividend announcement affect options pricing and open interest for PEY options?

Impact on option pricing – The $0.11/monthly dividend translates into a modest annualized dividend yield of roughly 1.2 % (PEY ≈ $9.00). In Black‑Scholes terms the dividend is treated as a discrete cash‑flow that reduces the forward price of the stock on the ex‑div date (≈ $0.11 lower). Consequently, call premiums will be trimmed by roughly the present value of that cash‑flow, while put premiums will rise by a comparable amount. The effect is most visible on near‑the‑money strikes that expire after September 15, especially the September‑ and October‑series, where the dividend‑adjusted forward will be reflected in the Greeks (lower Δ for calls, higher Δ for puts). Implied volatility is unlikely to spike dramatically because the dividend amount is small and already priced in, but you may see a slight compression of IV as the ex‑div date approaches and the dividend risk is resolved.

Open interest and trading behavior – American‑style PEY options give holders the right to early‑exercise ITM calls before the stock goes ex‑div, allowing them to capture the $0.11 per share. This creates a modest incentive for deep‑in‑the‑money call holders (Δ > 0.80) to close or roll positions in the days leading up to the record date (Aug 31) rather than let the option be exercised. Expect a modest uptick in call‑exercise activity and a shift of open interest from the front‑month to the next‑month contracts as traders roll their positions forward. At the same time, income‑focused investors may load up on puts or protective collars to hedge the anticipated post‑ex‑div price dip, boosting put open interest around the current spot level.

Actionable insight – If you own ITM calls expiring September 15, consider closing or rolling them to the October series before Aug 28 to avoid early‑exercise risk and capture any remaining time value. Conversely, a short‑call/long‑put “protective collar” placed now can lock in the expected $0.11 price drop while still earning the dividend. For speculative traders, a calendar spread—buying September calls and selling October calls—benefits from the small dividend‑induced forward shift and the likely decay of September IV as the dividend becomes a known quantity. Monitor the open‑interest heat map: a sudden concentration of puts at strikes just below the current price may signal hedging demand, presenting a potential short‑put opportunity with a limited risk profile.