July Calendar Spread

Discussion in 'Options' started by erol, Jul 16, 2009.

  1. erol

    erol

    Morning,

    I'm long an ATM September call, and I'm thinking of selling an ATM Jul Call.

    If this expires in the money, (which I think it would), what's the likelihood of being assigned?

    I'm hoping to collect small intrinsic premium, is this realistic?
     
  2. MTE

    MTE

    If it expires ITM you are guaranteed to be assigned, even if it expires ATM or slightly OTM there's still a good chance you'd be assigned, depending on the afterhours move in the underlying.
     
  3. spindr0

    spindr0

    ITM near exp, it can also trade intraday at a discount and close OTM and you can find yourself with an assignment notice... not often but it happens
     
  4. Sure it's realistic.

    But is it reasonable? I vote no.

    Very near term options provide very little premium, but a whole lot of risk.

    My 2 cents.

    Mark
     
  5. erol

    erol

    Thanks so much gentlemen,

    you've saved me from making a mistake.

    The underlying made a big move today (+12.5%), which i would have paid for.

    Amazing, this thing doesn't move at all for the past 6 weeks.

    Anyways, thanks again.