This early exercise by the Capital One Financial Call owners was expected by the Covered Calls Advisor since the remaining time value was very close to $0.00, so they elected to purchase the 200 shares at the $145.00 strike price and thus also capture today's $.60 ex-dividend. Despite not capturing today's dividend, this is a good outcome for the Covered Calls Advisor since the resulting +32.6% annualized return-on-investment (aroi) achieved is slightly better than the +27.7% maximum possible aroi that might have been achieved later on the November 19th options expiration date if the stock remained above the $145.00 strike price. The cash received from this position will most likely be invested in another Dividend Capture Strategy position in the Finance sector.
The transactions and detailed results for this position are as follows:
Capital One Financial Corporation (COF) -- Covered Calls Position Closed by Early Assignment
The Buy/Write limit order transaction was as follows:
10/29/2021 Bought 200 shares of Capital One stock @ $150.52 per share
10/29/2021 Sold 2 COF Nov. 19th, 2021 $145.00 Call options @ $7.32 per share
11/12/2021 Capital One Financial Covered Calls position closed out when two COF Call options exercised early, so these Calls expired and 200 COF shares were sold at the $145.00 strike price.
The overall performance result (including commissions) for this Capital One Covered Calls position was as follows:
Stock Purchase Cost: $28,641.34
= ($150.52 - $7.32) * 200 shares + $1.34 commission
Net Profit:
(a) Options Income: +$1,462.66
= ($7.32 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
+($145.00 -$150.52) * 200 shares
Total Net Profit: +$358.66
