I was notified via email early this morning by my broker (Schwab) that the one Morgan Stanley (ticker MS) November 6th, 2026 Call option was exercised early. Morgan Stanley's stock price increased from $181.43 when this position was established to $190.00 at yesterday's market close. The original $2.20 time value in the Call option when the position was established had declined to almost $0.00 at yesterday's market close. So, with 7 days remaining until the Nov. 6th, 2026 options expiration date, the owner of this Call exercised their option to buy the 100 shares at the $175.00 strike price in order to receive today's $1.15 per share ex-dividend and I achieved all of the original $2.20 per share time value as profit.
Although I will not receive the ex-dividend, I am satisfied with the +42.1%
annualized-return-on-investment (aroi) result achieved since it slightly exceeds the +39.2% 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 November 6th options expiration date.
The post when this Morgan Stanley Covered Call position was originally established is here.
As detailed below, the return-on-investment result for this Morgan Stanley Covered Call position was +1.3% absolute
return in 11 days (equivalent to a +42.1% annualized
return-on-investment).
Morgan Stanley (MS) -- New Covered Call Position
The buy/write transaction was:
10/19/2026 Bought 100 Morgan Stanley shares @ $181.43
10/19/2026 Sold 1 Morgan Stanley 11/6/2026 $175.00 Call option @ $8.63
Note: the Implied Volatility of the Call option was 30.2 when this buy/write transaction was executed.
10/30/2026 Early Assignment of this one Morgan Stanley Call option, so the Call expired and 100 Morgan Stanley shares were sold at the $175.00 strike price.
The overall performance results (including commissions) for this Morgan Stanley Covered Call position are as follows:
Covered Call Cost Basis: $17,280.67
= ($181.43 - $8.63) * 100 shares + $.67 commission
Net Profit Components:
(a) Option Income: +$862.33
= ($8.63 * 100 shares) - $.67 commission
(b) Dividend Income (If option exercised early on October 29th, the last business day prior to the October 30th, 2026 ex-div date): +$0.00
(c) Capital Appreciation (Morgan Stanley Call option assigned early on Oct. 30th): -$643.00
+($175.00 strike price - $181.43 stock purchase price) * 100 shares
Total Net Profit: +$219.33
= (+$862.33 option income + $0.00 dividend income - $643.00 capital appreciation)
Absolute Return-on-Investment: +1.3%
= +$219.33/$17,280.67
Annualized Return-on-Investment: +42.1%
= (+$219.33/$17,280.67) * (365/11 days)
10/19/2026 Bought 100 Morgan Stanley shares @ $181.43
