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Hello. Recently I was researching what happens if I hold a covered call through earnings. I came across this article on theoptionsguide.com http://www.theoption...ered-calls.aspx It discusses writing a covered call but shorting a DITM call to try to scalp the dividend. It seems the reasons this strategy will not work is because it is likely you will be assigned on that DITM call. However could someone explain to me how that would work? Let's take a hypothetical example: GD ex-dividend date 10/3 for $.51 a share Let's say GD is trading at $65.00 On 10/2 during the day you go long 100 shares and sell a $63 Oct call for $2.00 even. On 10/3 the stock drops and closes at $64.50 What would happen regarding you being assigned? Also do you need to be long the shares on 10/2 or is getting long the shares on 10/3 sufficient to receive the dividend when it is payed? Thank you!
