I was notified via email early this morning by my broker (Schwab) that the two Wells Fargo & Company (ticker WFC) February 13th, 2026 Call options were exercised early yesterday. Wells Fargo's stock price increased from $87.14 when this position was established to $91.56 at yesterday's market close. The original $.68 time value in the Calls when the position was established had declined on yesterday's market close to about $.10 per share. So, with 8 days remaining until the February 13th, 2026 options expiration date, the owner of these Calls exercised their option to buy the 200 shares at the $84.00 strike price in order to receive today's (December 6th) $.45 per share ex-dividend.
Although I will not receive the ex-dividend, I am satisfied with the +32.8%
annualized-return-on-investment (aroi) result achieved since it slightly exceeds the 30.8% maximum aroi that might have been achieved if this position instead had remained in-the-money and would therefore be assigned on the February 13th options expiration date.
The post when this Wells Fargo & Company Covered Calls position was originally established is here.
As detailed below, the return-on-investment result for this Wells Fargo & Company Covered Calls position was +0.8% absolute
return in 9 days (equivalent to a +32.8% annualized
return-on-investment).
Wells Fargo & Company (WFC) -- New Covered Calls Position
The buy/write transaction was:
1/28/2026 Bought 200 Wells Fargo shares @ $87.14
1/28/2026 Sold 2 Wells Fargo 2/13/2026 $84.00 Call options @ $3.82
2/6/2026 Early Assignment of these two WFC Call options, so the Calls expired and 200 WFC shares were sold at the $84.00 strike price.
The overall performance results (including commission) for this Wells Fargo Covered Calls position are as follows:
Covered Calls Net Investment: $16,665.34
= ($87.14 - $3.82) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$762.66
= ($3.82 * 200 shares) - $1.34 commission
(b) Dividend Income (Call options exercised early on February 5th, the day prior to the February 6th ex-div date): +$0.00
(c) Capital Appreciation: -$628.00 = ($84.00 strike price - $87.14 stock purchase price) * 200 shares
Total Net Profit [Call options exercised on 2/5/2026 (business day prior to the 2/6/2026 ex-dividend date)]: +$134.66
= (+$762.66 options income + $0.00 dividend income - $628.00 capital appreciation)
Absolute Return-on-Investment: +0.8%
= +$134.66/$16,665.34
Annualized Return-on-Investment: +32.8%
= (+$134.66/$16,665.34) * (365/9 days)
