Two potential return-on-investment results for this position are highlighted below and includes the possibility of early assignment since a quarterly ex-dividend of $.80 per share (1.5% annualized dividend yield) goes ex-dividend on February 19th (which is prior to the February 27th options expiration date). The stock would have to move up in price by February 18th which is the last trading day prior to the February 19th ex-div date and by an amount that would cause the time value remaining in the option to decline from its $3.94 value today to about $.20 or less. If this occurs, the owner of the Call option might exercise their right to purchase the stock at the $210.00 strike price, in which case the option would immediately expire worthless but the owner of the Call would then own the stock and would capture the dividend. This early assignment would be a desirable outcome since its +49.8% annualized return-on-investment (aroi) is greater than the +38.1% aroi that would be achieved if the position were to be instead assigned on its February 27th options expiration date. But either result would be attractive since they both exceed my preferred minimum annualized return-on-investment criteria (see criteria #8 and #9 at the bottom of this post) when using my Dividend Capture Strategy. Also, as I prefer, there is no intervening quarterly earnings report since Capital One's next quarterly earnings report on April 21st, 2026 is after this position's Feb. 27th, 2026 options expiration date.
As detailed below, two potential return-on-investment results are:
- +1.9% absolute return (equivalent to +49.8% annualized return-on-investment for the next 14 days) if the stock is assigned early (business day prior to the February 19th, 2026 ex-dividend date); OR
- +2.3% absolute return (equivalent to +38.1% annualized return-on-investment over the next 22 days) if the stock is assigned on the February 27th, 2026 options expiration date.
Capital One Financial Corporation (COF) -- New Covered Call Position
The buy/write transaction was:
2/5/2026 Bought 100 Capital One Financial shares @ $219.31
2/5/2026 Sold 1 Capital One 2/27/2026 $210.00 Call option @ $13.25 per share. The Implied Volatility of the Calls was 36.5 when this transaction occurred which, as I prefer, is well above the current S&P 500 Volatility Index (i.e. VIX) of 20.6.
2/19/2026 Upcoming quarterly ex-dividend of $.80 per share
Two possible overall performance results (including commissions) for this Capital One Covered Call position are as follows:
Covered Call Net Investment: $20,606.67
= ($219.31 - $13.25) * 100 shares + $.67 commission
Net Profit Components:
(a) Options Income: +$1,324.33
= ($13.25 * 100 shares) - $.67 commission
(b) Dividend Income (If option exercised early on February 18th, the last business day prior to the February 19th ex-div date): +$0.00; or
(b) Dividend Income (If COF stock assigned at the February 27th, 2026 options expiration date): +$80.00
= ($.80 dividend per share x 100 shares)
(c) Capital Appreciation (If Capital One Call option assigned early): -$931.00
+($210.00 strike price - $219.31 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $210.00 strike price at options expiration): -$931.00 = +($210.00 - $219.31) * 100 shares
At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy. Eight of the nine criteria are achieved for this Capital One Financial Covered Call position.
