Early Assignment of Covered Calls Position in Cisco Systems Inc.

Early this morning (on 1/4/2023), the Covered Calls Advisor was notified by my broker (Schwab) that the three Cisco Systems Inc. (ticker CSCO) January 13th, 2023 $46.00 Call options were exercised yesterday--Note: it is commonplace with early assignments that they normally occur on the last business day prior to the ex-dividend date.  Cisco shares increased from its purchase price of $47.09 five days ago to $47.94 at the market close yesterday.  The Delta (which is a good approximation of the probability of assignment at the options expiration date) had increased from 71.4 when the position was originally established to 91.0 at yesterday's market close. The original $.31 time value [$46.00 strike price - ($47.09 stock purchase price - $1.40 Call options price sold)] had declined on yesterday's market close to only $0.03 (at the midpoint of the $1.92/$2.02 Bid/Ask spread), so as expected (and with 9 days remaining until the options expiration date), the owner of the Calls exercised their option to buy the 300 Cisco shares at the $46.00 strike price in order to receive today's $.38 per share ex-dividend.  

As detailed below, the return-on-investment results for this Cisco Systems Inc. Covered Calls position was: +0.7% absolute return in 5 days (equivalent to a +48.5% annualized return-on-investment).  I was not disappointed in not receiving today's ex-dividend.  In fact, I actually preferred this early assignment outcome since, as is normally the case when using the nine criteria of my Dividend Capture Strategy, the annualized-return-on-investment (aroi) achieved of +48.5% exceeded the maximum aroi of +36.4% if this Covered Calls position would instead get assigned on its January 13th, 2023 options expiration date.       
 

Cisco Systems Inc. (CSCO) -- Covered Calls Position Closed by Early Assignment
The simultaneous buy/write transaction was:

12/30/2022 Bought 300 Cisco Systems Inc. shares @ $47.09
12/30/2022 Sold 3 Cisco 1/13/2023 $46.00 Call options @ $1.40.  Note: the Implied Volatility of these Calls was 19.1 when this transaction was executed.
1/3/2023 Cisco Call options owner exercised their options, so the Covered Calls position was closed out early. The 3 CSCO Calls expired worthless and the 300 Cisco shares were sold at the $46.00 strike price.

The overall performance result (including commissions) for this Cisco Systems Covered Calls position was as follows:
Covered Calls Net Investment: $13,709.01
= ($47.09 - $1.40) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$417.99
= ($1.40 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00

(c) Capital Appreciation [300 CSCO shares assigned on 1/3/2023 (the day prior to the options expiration date) at the $46.00 per share strike price]: -$327.00
+($46.00 - $47.09) * 300 shares

Total Net Profit achieved: +$90.99

= (+$417.99 options income +$0.00 dividend income -$327.00 capital appreciation)
 

Absolute Return-on-Investment: +0.7%

= +$90.99/$13,709.01

Annualized Return-on-Investment: +48.5%

= (+$90.99/$13,709.01) * (365/5 days)