Owww. 2 very deep fillings done, my wallet is feeling lighter.1-...

Owww. 2 very deep fillings done, my wallet is feeling lighter.

1- here is Black Scholes formula for calls and puts, its in VBA code for excel use;

Option Explicit
Global Const Pi = 3.14159265358979

Function BS(ByVal Today As Double, ByVal Maturity As Double, ByVal spot As Double, ByVal strike As Double, _
ByVal interest As Double, ByVal Volatility As Double, ByVal div_yield As Double, _
ByVal class As String) As Double

Dim d1 As Double, d2 As Double, t As Double
t = (Maturity - Today) / 365
d1 = (Log(spot / strike) + (interest - div_yield + Volatility ^ 2 / 2) * t) _
/ (Volatility * Sqr(t))
d2 = d1 - Volatility * Sqr(t)
If class = "c" Then
BS = spot * Exp(-div_yield * t) * CND(d1) - strike * Exp(-interest * t) * CND(d2)
ElseIf class = "p" Then
BS = strike * Exp(-interest * t) * CND(-d2) - spot * Exp(-div_yield * t) * CND(-d1)
End If

End Function

'Use the Excel built-in cumulative normal distribution function
Public Function CND(X As Double) As Double

CND = Application.WorksheetFunction.NormSDist(X)

End Function

-so I see its noted divvy in d1, and deducts the divvy (as a %) from the cost of money. So if the cash rate is 4.75% and the divvy is 3%, then the factor is 1.75%.
The cash rate is known to have a minimal effect on the option value anyway.
Cant say that this is much help, but you asked for it.

2- my opinion is ignore divvy for trend analysis. I do. Who can say how early some traders start factoring the divvy? Many believe the price reflects all known information and thus is fair, and there is good logic to this - although it is derived from the random walk model which has flaws.
If you look at blue chips, the pro traders are betting on what they think will be the outcome of the annual results and divvy. They are leveraged and optioned to the max, and really only start placing their bets about 7 days before the announcement. I like this attitude.
Of course it wont work for CST where expectations are more telegraphed, and liquidity is thinner, with no options.
What stock are you backtesting?

Assuming a blue chip, you can go back and look at previous divvy anncts, and try to discern a pattern - good luck. They are so over the place, that there is no pattern.

If we are talking pure TA, I would ignore the divvy.Trendlines are one of the few TA indicators that I do use. A good divvy would raise the trendline steeper, generating a 'buy more' signal - which IMHO is valid.
An exdivvy that did breach a trendline and generate a 'sell' signal is also valid. Thus we keep it simple.

Ive trade nab when it goes exdivvy. So if the divvy is .75c, then everybody knows it will fall by .75 the day it goes exdivvy. So the name of the game becomes 'will it fall by MORE or LESS than .75 ? Since .75 is factored in to the puts and calls, you cant make any money by trading it exdivvy on known info. You can only bet on whether it falls by more or less than the known amount.

So after all that, my original post is still the best answer. Deduct the divvy from the quote file hi lo open close, over the known period, or phase it in over a longer period that you decide.

I still ignore the divvy. The price of the stock is the price of the stock.

You should also ask this question in the metastock forum. Someone there might have a different answer.

Now its time for a lie down and a video. Saw "crop circles' the documentary video last week, its sensational. Lots of stuff on fibonacci, mendlebrot and patterns with maths.Some amazing new research with interviews with scientists. Ive not really been into this sort of stuff, but I must say Im impressed.Check it out, its a new release.

Let me know how you got on.