Stock didn't get called away

November 10th, 2014, 11:38 AM

I had 400 shares of aapl and I was short 4 of the 109 calls. AAPL closed at 109.01 on Friday expiration. Not only did I get the .47¢ dividend, the stock wasn't called away. Is this a common occurrence? It's it rare? Why do you suppose this happened?

Thanks

November 10th, 2014, 01:18 PM

TGoat

I had 400 shares of aapl and I was short 4 of the 109 calls. AAPL closed at 109.01 on Friday expiration. Not only did I get the .47¢ dividend, the stock wasn't called away. Is this a common occurrence? It's it rare? Why do you suppose this happened?

Thanks

You got the dividend because because the exdividend date was 11-06 and your calls were not in the money that day. If they were and the extrinsic value was less than .47 they would have been called away.

Why they were not called away on Sat expiration is just one of those things you will never know. Many probably were and you just happened to be one of the ones that were not.....it was only .04 in the money by end of day Fri so it was borderline....usually expect them to get called away.

The strategy to avoid this would have been to roll them out to another expiration before the ex-dividend date...thus reducing the risk of exercise and collecting more credit. All of the Theta value was gone at that time anyway and therefore had little protection to the downside left.

November 11th, 2014, 06:03 AM

ACstudio

You got the dividend because because the ex-dividend date was 11-06 and your calls were not in the money that day. If they were and the extrinsic value was less than .47 they would have been called away.

OK, now I've got it. Thanks

Stock didn't get called away

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Stock didn't get called away