Think I'll Get Called Away?

PM goes ex div tomorrow.
Closed @ 93 today.
I've got the MAR 87.5's against it.
Div is $1.25

Don't care either way,
just curious.

 

Unlikely. It would be to your benefit if you were. The Mar 87.50 Put is 2.20/2.68 at the close.

 

Excuse my ignorance.
This is a Covered Call.
I wrote the MAR 87.5 Calls against the stock.

 

A covered calls is a synthetic short put. If I'm the long call and I exercise a long March 87.50 call, I end up long stock and keep the dividend. But now to replicate what I had before, I need to buy a 87.50 put, which cost more than the dividend. Then the buyer has a synthetic long call. In addition, I have to consider the cost to carry the stock positions. If I had that long call, I would find more value in holding it.

 

Thank you.

 

I think the CBOE Options Institute has scheduled a webinar on Early Exercise for March 1st. You might want to look into it.