Early Exercise of Call Option to Capture Dividend

Quote from jmichaelp:

A few years ago, for about one year, I was able to successfully trade deep ITM covered calls for the dividend. However, options started being exercised after regular trading hours so my stock was traded away the night prior to being eligible for the dividend.

This, like most strategies, worked great while it worked but conditions change & you have to be flexible to what works at the time to make money.
I don't follow this., You were selling deep ITM calls against your stock prior to ex-div? Whre was the profit potential if not exercised? Are you implying that the call didn't drop as much as the dividend?
 
Back
Top