Alan answers a question posed by Graham, who asks:
I bought NRZ to sell covered call options and to capture a hefty dividend of 10% a year. Unfortunately, the option was exercised and I missed out on the dividend but did receive a nice premium. I’ve attached the trade specifics. Could I have avoided early exercise and how?
This video analyzes the combined strategies of covered call writing with dividend capture. Included in the video are discussions of ex-dividend dates, covered call writing calculations with the BCI Trade Management Calculator along with the pros & cons of early exercise from the perspectives of both the option buyer and seller.
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