I was reading the strategy described at http://www.theoptionsguide.com/dividend-capture-using-covered-calls.aspx . It goes like this : 1) Buy stock 2) Sell an in-the-money covered call 3) collect dividend 4) buy the call back and sell the stock The obvious catches I see are : - you can be assigned before you get to collect the dividend - the stock could drop below the strike of the covered call - commissions involved But it seems to me that this could be worked around. 1) I could write a call way in the money, with a delta of 1, almost completely eliminating downside risk 2) I could write it as a very long dated call. The positive theta would act as a deterrent for the call buyer to exercise his option early. It would at the very least cover commissions, if it is indeed exercised early. Concrete example : 1) Buy SPY at $126.08 2) Sell Dec 2013 $70 call (delta 1). Bid is $56.83 . 3) Total cost = $69.25 . 4) If assigned, collect $70. Profit = $0.75 which is 1% . 5) If not assigned, quarterly dividend would be around $0.63 . Buy the call and sell stock at the purchase price. The call will move by the same amount as the stock. There is no profit or loss here, just commissions. The $0.63 dividend is the net profit. About 0.9%. Seems either way, you can only win. What am I missing ? I am guessing the market for the DITM calls is not huge. But with the LEAPS, it seems to exist, still. One could do this the day before dividend is due. And repeat with any dividend stock that has LEAPS.