Will I lose my shares?
What are the chances in this case that the buyer will exercise their rights to buy? I did not anticipate the price of this ETF to rise this much (tomorrow is ex-date. After that, it might drop again). I am reluctant to do a calendar spread because this is a short-term holding, but i also don't want to lose it right now.
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A casual investor from MY, learning about the world of equity investment and setting up my retirement portfolio.
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MillionDollarDivSeek : buy back cover call
NorthernTrader MillionDollarDivSeek : exactly. Playing it safe is best.
CNNT OP MillionDollarDivSeek : I should have given more context that tmr is the ex-date, hence the buying frenzy, I'm 90% sure it will dip after that. The premium is way higher than the dividend, so it's not worth buying back.
MillionDollarDivSeek CNNT OP : Roll over your cover call
JoshCarter4 : My understanding is that you want to keep the shares because you want the dividend. In that case, you’re fine doing nothing. You only receive the dividend if you purchase the stock *before* the ex-dividend date. This is because the settlement is T+1.
If they exercise tomorrow, you lose the stock but you’ll still receive the dividend.