IEF Dividend Capture--or more likely, early option premium capture..

IEF goes ex-dividend next Monday, with a payout of about 0.25 per share.  Unlike AGG, the option market for IEF has reasonable ask/bid numbers.  I did a covered call of IEF (90.84)  with a sell-to-open on  90 November calls IEFKL (1.11) for a net investment of 89.73 per share.  These calls will probably be assigned over the weekend because of the dividend payout--in which case I will get an early payoff of the .27 premium on the calls.

 If the options aren't called then I will collect the dividend, which will lower my breakeven point to around 89.48.  I expect the Implied Volatility (IV) on these options to jump up next week to pretty much cover the amount of the dividend payout (the avg IV is currently 8.7) --there is no free lunch on Wall Street.   If this scenario plays out I will watching how quickly this dividend driven IV bump decays.  This in itself might be an interesting trade possibility if the ex-dividend bump in IV decays quickly.

I did a combo order to create this position.  Initially I offered 89.70, which didn't execute.  When I offered 89.73, which was 0.05 less than the asked side of the option, the order filled immediately.