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 …

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