Early assignment on bull put vertical spread

Discussion in 'Options' started by harpreetsingh194, Mar 24, 2020.

  1. Hi Folks,

    Sold LMT put 407.50 and bought LMT put 405 with expiry 3 April 2020. Last night was assigned on sold put as it was deep ITM due to market fall. It has lead to margin call in my account. I called TDA and they asked me to exercise the long call to get rid of the position. However, I think closing complete position would be lot better than exercising the long put. What would be the best way to deal with this. Don't want to deposit more cash to cover the margin call

    Thank you in advance.
  2. zdreg


    Write clearly your position. You don't have a call position.
    Last edited: Mar 24, 2020
  3. It is so far ITM that it is unlikely to have much extrinsic value - you might as well just exercise the long put.
    If you want to be super frugal, you could sell the assigned stock, then sell the long put you have. You would make money on whatever extrinsic value the put has (probably none, you are more likely to lose money on the spread!).