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)
