A friend of mine who’s new to covered calls asked me this recently, and it’s a great question.
Covered calls on stocks and ETFs are American-style options, which means they can be exercised—and you can be assigned—anytime before expiration. But that doesn’t mean it’s likely.
Here’s why:
Most call holders don’t exercise early because they’d lose the time premium that’s still in the option. Plus, market makers—who are often on the other side of your trades—hedge their positions and usually prefer to keep collecting interest on their short stock positions instead of exercising.
However, there are exceptions:
📅 Right before ex-dividend dates: If the dividend is worth more than the option’s remaining time value, traders may exercise early to capture it.
📉 When a stock is “hard to borrow”: Market makers who can’t short enough shares might exercise calls to get long stock instead.
So yes, assignment can happen anytime—but in most cases, it’s unlikely unless one of these special situations applies.
#CoveredCalls #OptionsTrading #TradingEducation #TradeSmart
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