Hi All, I understand how options work. But dont have experience with assignment. I have an account with Saxo and they are different from IBKR. In saxo, stocks are considered as non margin instruments, so you need to have full cash to buy stocks. But options, futures, CFD are considered as margin positions. I have an ETF portfolio with Saxo and against it using margin, I have short sold options for XLE and RDS-A(Amsterdam listed) at the beginning of the year and the strike price was ATM and expiry end of the year. I know bad bad timing So right now, 6 months down, the positions are deep in the money and these are American style options and can be assigned anytime. Since these are margin positions, I only top up the amount of cash to fulfill the negative PnL. But to make it cash secured, I will need to top up another 60% of the notional. So my question is will Saxo notify me in advance of upcoming assignment and give me time to transfer the funds to allow pay for the stock? Or do they just close out my position due to lack of cash to allow assignment? I would prefer not to keep idle excess cash in my Saxo account, as it doesnt earn any interest. I have asked this question to Saxo support, but I am not sure, their product knowledge is good enough, to understand my complicated question. Thanks in advance!
You have every reason to be concerned, The lack of knowledge and misinformation is prevalent not only at Saxo, but at most financial firms. The response you received is a red flag. I would consider taking your business to another place.
I expected people to atleast share their experience with how assignments take place with other brokers, if not Saxo. Do you get a notification in advance like T-2 or something?