I have three positions that will go ex-dividend tomorrow, on
March 13: MRK, UNH, and URS, and each
has an April covered call written against it.
I thought I might take a quick look at the deltas on these positions to
estimate whether any of them might be called early – a full month early in this
case.
The details of the three positions are:
·
MRK, ex-dividend 3/13, April 44 call out of the
money
·
UNH, ex-dividend 3/13, April 57.50 call out of
the money
·
URS, ex-dividend 3/13, April 40 call in the
money
I looked up the Deltas this morning and found that the MRK
contract is 48%, the UNH 17%, and the URS is 100%. From this I conclude that the
$130 I will collect from MRK and UNH is safe, but the URS dividends, totaling
$84, may go to some new owner if the calls are exercised today.
It still seems a long way out for an early call, but it is
reasonable to think that the URS shares could be called away. I’ll watch carefully and report in my next
post.
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