The Bear call above has a $1 spread. Dividends are tomorrow, which makes the options adjusted. This gives a pretty odd result. The price should drop by $1.53 ish tomorrow, after ex-div, right? That leaves the spread, at open (if price stays the same) around the money (Lower ITM, upper OTM - how do you say that on a spread, btw?). At any rate, the spread costs .05 to enter with a potential $1 payout and pretty much even odds - SPY could go up or down from its open. I don't think the risk of being assigned is that high. What am I missing?
What you are missing is that your short 319 calls will be assigned. Actually the 320's should be exercised as well. The way you can tell this is by looking at the puts. The 319 puts are trading at .37. So if someone is long the 319 calls, if the exercise the calls and buy the puts for .37, they will now be long spy stock and long the puts, which is synthetically the same as being long the calls. But now they will have the dividend of 1.53 - .37 for the puts so they will be 1.16 ahead, with the same synthetic position.