OK I see it now........ It's just about capturing part of the value of the probable overnight stock decrease. So the strange thing is that if a company pays 50% of the div. in 2 consecutive days (which is effectively/economically almost exactly the same as 100% in 1 day) the exercise behavior is very different! I thought economically the same = exercise behavior the same. Thanks!!
When my calls move into 90 delta there is often a larger spread. I would likely exercise early to get the divy and also not get squeezed with the spread but I can't see the spread. I don't exercise that often but it us usually due to poor spreads or divy.
If the extrinsic value of your covered call is less then the amount of the dividend then someone could take your shares from you to get the dividend - they make the difference between your EXT and the dividend (but I don't understand why they don't just buy the shares with no EXT premium and collect the full dividend - but it still happens). However, even though you will not get your dividend, you are still making a premium on your covered calls. Not as much as you would have made by collecting the dividend and keeping the covered calls, though.