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)