option assignment

Discussion in 'Options' started by jitao, Jun 15, 2009.

  1. jitao


    Hello guys, this is my first time play options need your help.

    I have bought 200 shares of X at $19 this March and sold 2 call options strike at $25 then. Now the market price is over 37. My option will be expired in July. Is there any chance that my option would be expired without being assigned?
  2. 1) If "X" continues to remain substantially above the strike price, you WILL be exercised. Don't delude yourself into believing that your position will be forgotten by anybody on the long-side of the market.
    2) You WILL NOT be exercised if "X" falls below the strike price and remains there between now and expiration.
  3. Chance?

    Yes, if X is below 25 when expiration arrives, you will not be assigned.

    if X is exactly 25, it can go either way.

    If X is 25.01 or 25.02, there is a very, very small chance of not being assigned.

  4. Exercise is basically automatic these days so the people who are long those calls dont have to do anything and those options will be exercised for them at expiration so long as they're in the money.
  5. johnnyc


    besides a complete collapse in the underlying the only chance of you not get assigned is if someone long those calls chooses not to exercise, which would be pretty unlikely considering those calls are deep in the money

  6. They're exercised automatically
  7. I know you know that the owner of an ITM option can submit a DO NOT EXERCISE memo to his broker.

  8. obviously
  9. >>> I know you know that the owner of an ITM option can submit a DO NOT EXERCISE memo to his broker. <<

    Wouldn't that only be the case if the option was on;y a little in the money? And even if true, why would anyone throw away the ITM amount> Anything to do with pinning risk?
  10. You're correct it would only be the case if those options were just a penny or so in the money otherwise its throwing away money.

    dagnyt is a stickler for details and he's generally correct.
    #10     Jun 16, 2009