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I forgot the ex-dividend date and my covered call got assigned early

Your shares were called away the day before the ex-dividend date, so the dividend went to the call buyer, not you. That's a normal move for them when your call is in the money and has little time value left. Here's what it cost, and the check that stops it next time.

Options guide · 9-minute read · Updated 2026-10-27

What's happening in your account right now

You woke up on the ex-dividend date and your 100 shares were gone. Your covered call is gone too. In their place: cash equal to the strike times 100. The call still had weeks left. The dividend you were counting on won't be paid to you.

This is Early assignment, and it's legal and common. US stock options can be exercised any day before expiry. The night before an Ex-dividend date is one of the most likely times.

You haven't been cheated, and you didn't break anything. You just missed one date. Here's why the buyer did it, and what it cost you.

Why the call buyer exercised early

To get a dividend, you must own the shares before the ex-dividend date. The person who bought your call doesn't own shares. They own the right to buy yours.

If your call is in the money, they can exercise the day before the ex-date, take your shares at the strike, and collect the dividend themselves.

It's worth it to them when the dividend is bigger than the call's remaining time value. Exercising throws away that time value. If it's only a dime and the dividend is more than a dollar, exercising is the better deal.

That's the whole logic. The early assignment and dividends calculator runs it on your own numbers.

What it cost you (an illustration, not a trade idea)

You owned 100 shares of a made-up stock, XYZ, bought at $50. With XYZ at $51, you sold a 45-day $52 call for $1.50 ($150). XYZ pays a $1.20 dividend ($120), with the ex-date three weeks later. You'd counted the dividend in your plan.

XYZ rose to $56. The day before the ex-date, your $52 call was worth about $4.10: $4.00 of real value and only $0.10 of time value. The dividend was $1.20. The buyer exercised.

What you planned vs what happened:

You still made money on the trade. But you lost the dividend, and you lost the shares you'd planned to keep.

Now say you want the shares back. On the ex-date, XYZ usually opens lower by about the dividend, so around $54.80.

Compared with simply holding the shares and selling no call, you're behind by −$250: the $280 of rise the call capped, plus the $120 dividend, minus the $150 premium.

Could you have stopped it a week ago?

Partly. A few days before the ex-date, you could have bought the call back at about $4.10 to keep the shares and the dividend. Here's that path next to the others:

Buying back cost about the same as being assigned. The real decision point wasn't the week before. It was the day you chose the strike and the expiry. Once the call was deep in the money right before the ex-date, the dividend was mostly gone either way.

Your choices now

1. Leave it. You made $350 on the trade. If you were neutral on XYZ, this is a fine ending. The cash is free for the next trade in the wheel strategy: sell a put to get back in at a lower price.
2. Buy the shares back. If you want XYZ long-term, buy it, knowing it costs more than you sold at.
3. Sell a put to re-enter. A cash-secured put below today's price gets paid while you wait, but the shares may not come back to you.

If this was a taxable account, being called away may also have created a taxable gain. This is general information, not tax advice; check with a tax professional or your broker.

The check for next time

When you sell any covered call, put the next ex-dividend date in the same journal row. Then ask three questions:

1. Is there an ex-date before my expiry? If not, this can't happen on this call.
2. If the stock rises above my strike before the ex-date, am I fine losing the shares and the dividend? If yes, carry on.
3. If not, change the trade. Choose an expiry before the ex-date, choose a strike further above the price, or skip the call until after the ex-date.

And in the week before an ex-date, check any call that's in the money. If its time value is smaller than the dividend, expect assignment. You can roll it up and out, often for a cost, or let it go. Our guides on rolling before ex-dividend and early assignment on a covered call go into each.

In Canada, covered calls are widely allowed in a TFSA or RRSP, and the same early-assignment logic applies on US-listed stocks. Options permissions differ by broker.

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