Early Assignment of AT&T Inc. Covered Calls Position

This morning, the Covered Calls Advisor received notification from my broker (Schwab) that the 5 AT&T Inc. (ticker symbol T) January 18th, 2019 Call options were exercised early, so the 500 shares of AT&T stock in the Covered Calls Advisor Portfolio were assigned (i.e. sold) at the $28.00 strike price. 

AT&T stock was $30.77 at yesterday's market close.  Early exercise by the owners of these Call options was expected since there was less than $.05 time value remaining in these Call options.  So, the Call owners were willing to immediately forego the remaining small time value per share (by exercising their option to buy the shares) in order to capture today's $.51 per share ex-dividend.  The per share stock price had increased from $28.54 at the end of 2018 to $30.77 at yesterday's market close.  Also as shown below, the Call options were at $.32 at the end of 2018.

As detailed below, the actual return-on-investment result achieved for this Las Vegas Sands position a +1.1% absolute return (equivalent to +51.1% annualized return) for the 8 days this position was held.  The Covered Calls Advisor will retain the cash received in the Covered Calls Advisor Portfolio until a new Covered Calls position is established, the transactions details of which will be posted on this blog site the same day they occur.

AT&T Inc. (T) -- New Covered Calls Position
12/31/2018 End-of-Year market value of 500 AT&T shares  was $28.54 per share.
12/31/2018 End-of-Year market value of 5 January 18, 2019 $28.00 AT&T Call options was $.86 each.
01/08/2019 Early assignment of 5 Call options, so 500 shares of AT&T sold at $28.00 strike price.

The overall performance result (including commissions) during calendar year 2019 for this AT&T Covered Calls position was as follows:
Covered Calls Cost Basis: $13,840.00
= ($28.54 - $.86) *500

Net Profit Components:
(a) Options Income: +$430.00
= ($.86*500 shares)
(b) Dividend Income: +$0.00 since position assigned early (i.e. day prior to 1/9/2019 ex-dividend date for AT&T

(c) Capital Appreciation (T shares assigned at $28.00 strike price at options expiration): -$274.95
+($28.00-$28.54)*500 shares - $4.95 commissions

Total Net Profit: +$155.05

= (+$430.00 Call options income +$0.00 dividend income -$274.95 capital appreciation)

Absolute Return: +1.1%

= +$155.05/$13,840.00

Annualized Return: +51.1%

= (+$164.95/$13,840.00)*(365/8 days)