getting assigned on ex-dividend days

[dr_trick]

Hi all,

I just started trading options recently. I've done a couple of call spreads so far. But I keep getting assigned on ex-dividend days.

I'm curious if this is a strategy (i.e. exercising options for dividends)? I'm trying to make sense of why anyone would do this i.e. the risk of the stock falling further after the going ex-div would wipe out any gains.

My problem is that after assignment, my broker places a short position in my account and as a result I have to pay the dividends.

any ideas please ?

cheers

 

[Martinghoul]

It's done sometimes if it's more optimal to exercise early. What exactly goes on depends very much on the specific circumstances.

 

[dr_trick]

Thank you.