What Is the ‘Dividend Protection’ Clause, and Is It Common in Crypto Options Contracts?

A dividend protection clause is a provision in an options contract that requires the option's terms (strike price and/or contract size) to be adjusted to compensate the holder for any extraordinary cash dividends or distributions. While common in traditional equity options, it is less standardized in crypto options.

However, major crypto exchanges do have clear rules for handling forks and airdrops, which serve a similar protective function.