Can options exercised after market closes on Friday pull dividends

External question — Personal Finance Stack Exchange Author: Keith Original post: https://money.stackexchange.com/questions/124163 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Assume a stock has an ex-dividend date that falls on a Monday. A covered call is sold Friday just before close. If the call is in the money would the option owner be able to exercise the call in time to claim the dividend? I'm assuming the settlement date would be Saturday for that transaction similar to a monthly option being exercised ITM? I've seen it stated that the owner of the shares at the end of trading the day before the ex-dividend date gets the dividend. I've also seen it stated that as long as you buy the shares before the ex-dividend date you will get the dividend. The Friday afternoon to Monday morning gap seems to create a situation where those two statements may not always both be correct.

External answer — Personal Finance Stack Exchange Author: Bob Baerker Original post: https://money.stackexchange.com/a/124165 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The option owner can exercise the ITM call. Even if he doesn't, the OCC exercises all options that are one cent ITM at expiration unless the owner of the call desgnates through his broker that his long options not be exercised. This would make sense if the closing cost exceeded the ITM amount. This process is called Exercise By Exception . The owner of the stock on Friday always gets the Monday dividend. It doesn't matter if the stock is purchased on the market or if it is acquired by exercise.