Option spreads, early exercise and other wrinkles
A week ago Monday I created an IEF (iShares Lehman 7-10 Yr Treas Bond) bear spread in my Schwab margin account—with the short calls deep in the money at S90. Several of the calls were assigned that night when IEF went ex-dividend ($0.248/share). Since I wasn’t long IEF, this assignment resulted in a short position being created in my account. I was surprised the calls were assigned since …
