Got assigned on call options

Discussion in 'Options' started by blueraincap, Jun 10, 2022.

  1. TheDawn

    TheDawn

    A stock will only be hard to borrow for shorting not for buying. And if it's to really short a hard-to-borrow stock, it will be to buy a put and then exercise it. It wouldn't be to buy a call. And usually when the stock is really hard to borrow, the broker wouldn't even allow you to keep the short transaction open; it will demand you to buy back the stock to close the short right away so it'll be a much ado about nothing.
     
    #11     Jun 11, 2022
  2. TheDawn

    TheDawn

    Or bought a call instead of a put and then exercised it thinking it will protect against a price drop. Either way the guy is a noob.
     
    #12     Jun 11, 2022
  3. qwerty11

    qwerty11

    Actually it was a slightly cynical response from me (sorry!). Because you start with a completely wrong stock price (as parts of the day of exercise the option was considerable ITM) and put up a whole story after that.

    But anyway, we leave it to the (lucky!) TS to filter out the useful parts from this topic...
     
    #13     Jun 11, 2022
  4. TheDawn

    TheDawn

    The strike is at $18 but the market price of the underlying is at $15 and somehow the OP got assigned. That's how I understood it.

    Thanks for clarifying your sarcasm.
     
    #14     Jun 11, 2022
  5. newwurldmn

    newwurldmn

    you are wrong.

    you will buy calls to hedge the buy in risk.
     
    #15     Jun 11, 2022
  6. qwerty11

    qwerty11

    No, underlier was around $19 that day!

    (he even says "name at $18.70" but that is not relevant as exercise was done the previous day)
     
    Last edited: Jun 11, 2022
    #16     Jun 11, 2022
    donnap likes this.
  7. TheDawn

    TheDawn

    What was the underlying's price at the time of the exercise?
     
    #17     Jun 11, 2022
  8. R123

    R123

    The few times I have had early exercises that did not make mathematical sense have all occurred in periods of market sell off, I think there is some people who lose it during these times.
     
    #18     Jun 11, 2022