At that point the broker just liquidates the position and the trader gets the cash value...and in this case they just buy more stonk on Monday.
A buyer of an option can never be assigned. He can only exercise his option or automatically have the option exercised if is in the money at expiration. The exception is if the customer opts not to exercise by giving notice to the broker not to exercise. Customers frequently opt out if the stock price is slightly in the money at expiration to avoid exercise because they don't want to take the risk of some news coming out over the weekend before the exercised hits their account at Monday opening which could turn a profit into a loss. They also don't want to be or be forced to liquidate their position because of a margin call and inability to have enough capital forthe new position. IB has the right idea They automatically liquidate the position at the opening no if or buts, if you you don't have money/stock to maintain the new position.
I think you are agreeing with me? I think we are both saying Robinhood was under no pressure due to OP's premise, which is that the long shares could not be sold.
I thought this was explained to me once in the options forum... Why do they need to have the capital to purchase the shares, if the options are all deep in the money at expiry (or even before expiry and you just want to call away the shares)? Extreme example to make it easy. You have $1K in account. 2 years ago you bought a Jan 31th 2021 option with a 50 strike when the stock was 5 bux per share. The options at the time cost, I dunno, $1 let say. So you spent $500 for the option. You now have $500 cash in the account So on Thursday Jan 28th 2021 you exercise the option and the stock settled at 300 per share. You are assigned the shares at the price of 50, but since the stock is at 300, there is instantly $30,000 NAV in your account, (+ the $500 cash.) The next day (Friday) you then sell the shares at 300 (assuming no movement) and voila?
humorous. you repeat a statement from caroy which was incorrectly worded. I guess it was beneath your ability to comprehend the correction. Exercise is the right of the buyer. Assignment is associated with the seller of the option. Pray tell and there may be reasons why do you do an early exercise and possibly be subject to a margin call which could have been avoided by selling the option? To top it off your voila is a baseless assumption. The stock could open up at 159 or 600. Your goal was not to have a position in the stock, neither long or short but to be in options so as to leverage your capital.