I am looking for ways to generate income with less risk involved in the market so have been doing some research in bull call spreads. My account is with TD and only has long options permission. It will let me do a vertical call spread, but doing one of those risks possibility of early assignment of the short portion of the spread. If I was assigned the short leg of how would that work if my account is not margin, but I was assigned a short position of 100 shares of XYZ worth more than the cash I have on my account?
I am looking for ways to generate income with less risk involved in the market why would you do that by selling options? did you not see what happened to tastyworks client base?
What did happen to them? And if anything did, how was it different from any retail investor during the COVID crash?
Options generally aren't exercised early except in limited situations. For calls it can occur just before a dividend or in a hard to borrow stock. For a puts it is an interest rate play. Other than the call situations above, early assignment doesn't mean more risk, it means more margin. So if it happened, you would receive a margin call and if you couldn't meet it you would close the remaining position.