Early Assignment of Covered Call Position in Expand Energy Corporation

I was notified by Schwab early this morning that the one Expand Energy Corporation August 21st, 2026 Call option was exercised yesterday on the day prior to today's $.575 ex-dividend date.  The Expand Energy stock price increased from $91.26 when this position was established to $96.28 at yesterday's market close, the original $1.40 time value in the Call option when the position was established had declined on yesterday's market close to $0.62.  So, with 9 days remaining until the August 21st options expiration date, the owner of this Call exercised their option to buy the 100 EXE shares at the $90.00 strike price in order to receive today's $.575 per share ex-dividend. 

I was surprised that the owner of this Call option exercised their right in this instance since they decided to immediately forego the remaining $.62 time value profit potential (which I am pleased to have received as an immediate profit addition to my return-on-investment result for this position). I am also pleased with the +72.1% annualized-return-on-investment (aroi) result achieved today by early assignment since it exceeds the maximum +50.8% aroi that might have been achieved if this position instead remained in-the-money and would therefore be assigned on its August 21st, 2026 options expiration date.   

The post when this Expand Energy Covered Call position was originally established is shown here.

As detailed below, the return-on-investment result for this Expand Energy Covered Call position was +1.6% absolute return in 8 days (equivalent to a +72.1% annualized return-on-investment).

Expand Energy Corporation (EXE) -- Covered Call Position Closed by Early Assignment
The Buy/Write transaction was as follows:
8/5/2026 Bought 100 shares of Expand Energy Corp. stock @ $91.26 per share.  
8/5/2026 Sold 1 Expand Energy August 21st, 2026 $90.00 Call option @ $2.66 per share.  The Implied Volatility of the Call option was 26.6 which, as preferred, is well above the current 15.5 of VIX.
8/13/2026 One Expand Energy Call was exercised on the day prior to its August 13th, 2026 ex-dividend date, so the Call option expired and the 100 Expand Energy shares were sold at the $90.00 strike price, which closed out this Covered Call position.

The overall performance results (including commissions) are as follows:
Covered Call Position Net Investment: $8,860.67
= ($91.26 - $2.66) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$266.00
= ($2.66 * 100 shares)
(b) Dividend Income (EXE Call option exercised early on Aug. 12th, the last business day prior to the August 13th ex-div date): +$0.00
(c) Capital Appreciation: -$126.00
+($90.00 strike price - $91.26 stock price) * 100 shares

Total Net Profit: +$140.00

= (+$266.00 option income +$0.00 dividend income -$126.00 capital appreciation)

Absolute Return-on-Investment: +1.6%

= +$140.00/$8,860.67

Annualized Return-on-Investment: +72.1%

= (+$140.00/$8,860.67) * (365/8 days)

Covered Call Position Established in Alphabet Inc.

A new short-term Covered Call net debit buy/write limit order was established yesterday afternoon in Alphabet Inc. (ticker GOOGL) for the August 21st, 2026 expiration and at the $335.00 strike price.  The order was placed at a $332.05 limit price, so the extrinsic value (which represents the maximum profit potential for this position) was $2.95 per share [$14.67 Call option premium - ($346.72 stock purchase price - $335.00 strike price)].  The probability that this position will be in-the-money and therefore assigned on its options expiration date was 74.6% when this order was transacted.

As detailed below, the potential return-on-investment result is +0.9% absolute return-on-investment in 10 days (equivalent to a +32.4% annualized return-on-investment).  

Alphabet Inc. (GOOGL) -- New Covered Call Position

The simultaneous buy/write transaction was as follows:
8/11/2026 Bought 100 shares of Alphabet Inc. stock @ $346.72 per share.  
8/11/2026 Sold 1 Alphabet Inc. August 21st $335.00 Call option @ $14.67 per share.
Note: The Implied Volatility of the Call options was 30.8 when this transaction was executed which, as I prefer, is well above the current 15.4 of the S&P 500 Volatility Index (i.e. VIX). 

A possible overall performance result (including commissions) would be as follows:
Covered Call Cost Basis: $33,205.67
= ($346.72 - $14.67) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,466.33
= ($14.67 * 100 shares) - $.67
(b) Dividend Income: +$0.00 
(c) Capital Appreciation (If Alphabet stock is above $335.00 strike price at the 8/21/2026 options expiration date): -$1,172.00
= ($335.00 strike price - $346.72 stock purchase price) * 100 shares

Total Net Profit Potential: +$294.33
= (+$1,466.33 option income +$0.00 dividend income - $1,172.00 capital appreciation)

Potential Absolute Return-on-Investment: +0.9%
= +$294.33/$33,205.67
Potential Equivalent Annualized Return-on-Investment: +32.4%
= (+$294.33/$33,205.67) * (365/10 days)

Established Covered Calls in Otis Worldwide Corporation

A short-term Covered Calls position of 10 days duration was established late this morning in Otis Worldwide Corporation (ticker OTIS).  My buy/write net debit limit order at $71.70 was executed and the time value was $.80 per share [$1.38 Call options premium - ($73.08 stock purchase price - $72.50 strike price)].  An in-the-money strike price was established with the probability that Otis' stock will close in-the-money (i.e. above the $72.50 strike price) on the 8/21/2026 options expiration date was 57.5% when this transaction was executed.  An upcoming ex-dividend this Friday of $.44 per share is included in the potential return-on-investment results shown below.  

As detailed below, a potential return-on-investment result if Otis' share price is in-the-money (i.e. above the $72.50 strike price) and therefore assigned on its August 21st, 2026 options expiration date is +1.7% absolute return-on-investment (equivalent to +62.8% annualized return-on-investment for the next 10 days).

Otis Worldwide Corporation (OTIS) -- New Covered Calls Position

The buy/write net limit order transaction was as follows:
8/11/2026 Bought 200 Otis Worldwide Corporation shares at $73.08.

8/11/2026 Sold 2 Otis 88/21/2026 $72.50 Call options @ $1.38 per share.  The Implied Volatility of these Calls was 26.7 when this position was established, which is well above (as preferred) the current value of the S&P 500 Volatility Index (i.e. VIX) which was 15.4.

8/14/2026 Ex-dividend of $.44 per share.  

A possible overall performance result (including commissions) for this Otis Worldwide Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $14,341.34
= ($73.08 - $1.38) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$274.66
= ($1.38 * 200 shares) - $1.34 commission
(b) Dividend Income: +$88.00 = $.44 per share x 200 shares
(c) Capital Appreciation (If 200 Otis shares assigned (i.e. above the $72.50 strike price) on the 8/21/2026 options expiration date): -$116.00
+($72.50 strike price - $73.08 stock purchase price) * 200 shares

Total Net Profit Potential (If 200 Otis Worldwide Corp. shares assigned at the $72.50 strike price on the 8/21/2026 options expiration date): +$246.66

= (+$274.66 options income + $88.00 dividend income - $116.00 capital appreciation)

Potential Absolute Return-on-Investment (If 200 Otis shares assigned (i.e. sold) at the $72.50 strike price on the 8/21/2026 options expiration date): +1.7%

= (+$246.66/$14,341.34)

Potential Annualized Return-on-Investment (If 200 Otis shares assigned at the $72.50 strike price on the 8/21/2026 options expiration date): +62.8%
= (+$246.66/$14,341.34) * (365/10 days)

Early Assignment of Covered Calls Position in IBM Corporation

I was notified via email early this morning by my broker (Schwab) that two IBM Corporation (ticker IBM) August 21st, 2026 Call options were exercised early.  IBM's stock price increased from $217.67 when this position was established to $237.28 at yesterday's market close.  The original $3.98 time value in the Call options when the position was established had declined completely to $0.00 at yesterday's market close. So, with 14 days remaining until the 8/21/2026 options expiration date, the owner of these Calls exercised their option to buy the 200 shares at the $205.00 strike price in order to receive Monday's $1.69 per share ex-dividend -- so I achieved all of the original $3.98 per share time value as profit.  

Although I will not receive the ex-dividend, I am pleased with the +51.5% annualized-return-on-investment (aroi) result achieved since it exceeds the 41.1% maximum aroi that might have been achieved if this position instead had remained in-the-money and would have therefore been assigned on its upcoming August 21st options expiration date.   

The post when this IBM Covered Calls position was originally established is here.  

As detailed below, the return-on-investment result for this IBM Corporation Covered Calls position was +2.0% absolute return in 14 days (equivalent to a +51.5% annualized return-on-investment).

IBM Corporation (IBM) -- Covered Calls Position Closed by Early Assignment

The detailed transactions for this position were as follows:

7/27/2026 Bought 200 IBM Corporation shares @ $217.67
7/27/2026 Sold 2 IBM 7/27/2026 $205.00 Call options @ $16.65 per share.
8/7/2026 Early Assignment of these two IBM Call options, so the Calls expired and 200 IBM shares were sold at the $205.00 strike price.

The overall performance results (including commissions) for this IBM Covered Calls position are as follows:
Covered Calls Net Investment: $40,205.34
= ($217.67 - $16.65) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$3,328.66
= ($16.65 * 200 shares) - $1.34 commission
(b) Dividend Income (Two Call options exercised early on August 7th, the last business day prior to the August 10th, 2026 ex-div date): +$0.00
(c) Capital Appreciation (IBM Call options assigned early): -$2,534.00
+($205.00 strike price - $217.67 stock purchase price) * 200 shares

Total Net Profit [Two Call options exercised early]: +$794.66

= (+$3,328.66 options income +$0.00 dividend income -$2,534.00 capital appreciation)

Absolute Return-on-Investment: +2.0%

= +$794.66/$40,205.34

Annualized Return-on-Investment: +51.5%

= (+$794.66/$40,205.34) * (365/14 days)