Will the dividend announcement influence the implied volatility and options activity on SIA?

Impact on implied volatility (IV) and options activity

The August dividend ( $0.078  per share, ≈ 5 % annual yield) is modest but it will still be a catalyst for short‑dated options on SIA. As the ex‑dividend date approaches, market makers must re‑price the underlying to reflect the expected $0.078 drop in the stock price, which creates a “dividend‑adjustment” delta shift. This typically widens the IV curve for the nearest‑expiry strikes—especially for out‑of‑the‑money (OTM) calls that are most sensitive to a small price decline and for OTM puts that gain protection from the downside. Expect a noticeable uptick in IV for the 1‑ to 2‑week expirations and a modest rise in the overall IV skew (higher IV on puts relative to calls) as traders position for the dividend capture and for potential post‑dividend price drift.

Trading implications

1. Short‑dated options – Anticipate elevated volume and a 5‑10 % IV boost in the 1‑week to 1‑month expiries. If you are delta‑neutral, consider buying OTM puts or selling OTM calls to profit from the expected price drop and the IV expansion.
   
2. Dividend‑capture strategies – Traders often buy calls just before the ex‑date, hold through the dividend, and sell the underlying after the drop. The resulting “forward‑start” option demand can push up IV on the nearest‑expiry calls; a quick‑sell of those calls after the ex‑date can capture the IV contraction.
   
3. Post‑dividend roll‑down – Once the dividend is paid, IV typically contracts, especially on the front‑month series. A calendar spread (longer‑dated call vs. short‑dated call) can exploit this contraction, buying the longer‑dated leg and selling the short‑dated leg before the ex‑date, then closing the short leg after the dividend when IV narrows.

Overall, the dividend announcement will generate a short‑term lift in implied volatility and a spike in options volume around the ex‑dividend date. Positioning in the near‑term options—either by taking advantage of the IV expansion (long puts/short calls) or by setting up calendar spreads to capture the subsequent IV compression—offers a focused way to monetize the dividend‑driven market dynamics on SIA.