Sunday, December 20, 2009

Assignment / non-assignment of SPY December calls

The market was unusually obliging last week.   My Dec 110 calls were not assigned Thursday night when SPY went ex-dividend, because SPY closed about $0.20 below 110, but then on Friday SPY closed above 110, so my calls were assigned on Saturday.  This combination gave me the unexpected dividend of .59 and the maximum possible profit of 1.60 on the covered call position.

Not surprisingly my quarterly SPY 109 options, expiring on the 30th did not get assigned on the ex-dividend date either.   With the $0.59 dividend my break-even point on that position drops to 107.95

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