OddTrader
Registered: Mar 2003
Posts: 5271 |
09-15-09 03:55 AM
http://www.elitetrader.com/vb/showt...133#post2573133
Quote from dagnyt:
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Quote from OddTrader:
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I've never traded futures options and probably should not have replied.
Mark
Unquote
Mark, have you ever got any early assignments? Yes or No?
I've been awaiting your answers (for this particular question)!
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Yes, I have.
During expiration week. One or two at a time (for maximum commission pain). Always calls, never puts.
This was many years ago, before there were any deep discount brokers.
In recent years have traded only European options.
Mark
Why would you keep telling people repeatedly that early assignment is OK and hedged? And you yourself sell only European options (that cannot have early assignment)!
You understand risk too well and too much, I guess!
And you transfer your knowledge to ALL traders of options for stocks, futures and else, without properly advising them the potentially worst possible risk involved, KNOWINGLY or unknowingly.
http://www.elitetrader.com/vb/showt...gn*#post2265311
Quote from dagnyt:
4) If anyone did exercise the call option, you would NOT be unhedged. The exercise would take your stock, converting your buy-write into NO position.
Mark
The Rookies Guide to Options
http://www.elitetrader.com/vb/showt...gn*#post2156117
Quote from dagnyt:
I know you didn't ask this, but early assignment is usually beneficial to the covered call writer and unless you desperately do not want to sell the shares, early assignment is your friend. [It allows you to reinvest the proceeds of the sale early - and it's always a good idea to put your money to work ASAP when it's earning income.]
Mark
http://www.elitetrader.com/vb/showt...gn*#post2072068
Quote from dagnyt:
Being assigned early is NOT a burden. It is nothing to fear, and in fact is often an advantage. BIG EXCEPTION: cash-settled American style options (OEX). It's not a good idea ever to be short those options.
Many times (but not always), when assigned early, you can either
a) buy back the stock and sell the same call with some remaining time premium or
b) sell the stock and sell the same put with residual time premium
Mark
http://www.elitetrader.com/vb/showt...gn*#post2044411
Quote from dagnyt:
2) What are you trading? If it's a stock, being assigned early is never a problem. You have a position that is never worse than you had before being assigned.
Mark
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