There are lot of people still wondering why NAV is reducing so much on EX-Dividend date + Market is down at the same time? Here is an example on how to look at it. I don’t see any explanation on how it’s worked and not to panic during this time as a Covered Call investor. Example: Ex-Dividend Date for $HHIS is AUG 31. So, the previous trading day closing (AUG 28th FRI) after the market is closed, the distribution amount of 0.27$/share is taken off from the NAV for distribution on Pay Day (which is SEP 4). Whatever the option premium generated during the whole month + any Dividend received for some of the company is accumulated into HHIS’s NAV. Now the share price is 11.05 11.49 - 11.05 =0.44 reduced compared to previous day closing and now. 0.44 = 0.27 (reduced from the NAV for Distribution) + 0.17 (reduced due to market downturn) Hope this explaination helps! Same thing applicable to all Covered Call ETF’s. Try calculating yourself for your holdings and let me know if you have doubts…!!! $USCL$QQCL$ENCL$HHIS$MSTE$HBTE$BANK$UTES$BIGY$EASY$QDAY$SDAY$CDAY$YTSL
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6 Comments
Golden Pancake@free2068 · 11d
Well, look at that… NAV is down and suddenly it’s shopping day! Ex-dividend days are basically my Black Friday. I see red and my first thought is, “How much can I buy?”
DbleTrble @nimble_minx · 10d
Every x-dividend day, the same little heart attack and then I remember it’s discount day!🛍️
Slimshady @eminem2022 · 11d
I understand that the $0.27 distribution is deducted from NAV on the ex dividend date. But I’m confused about the cash collected from selling covered call options during the month. When exactly does that option premium increase the NAV? Is it already reflected in the NAV every day as the options change in value, or is it added to NAV later?
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