WSBers playing with fire and getting burned: NKLA hard to borrow early assignments on call spreads

Discussion in 'Options' started by blazespinnaker, Jun 23, 2020.

  1. "I had NKLA credit spreads, where the short legs got assigned. Exercised the long legs the next day immediately but they wouldn't settle until after the weekend. I still got charged 360% interest for 3 days. My account value is only 5K lol. I'm done."

    Etrade should eat this, IMHO.

    rule #1: Avoid anything on reg sho unless you really know what you're doing.
  2. newwurldmn


    Why should etrade eat this?
  3. Real Money

    Real Money

    Last edited: Jun 23, 2020
  4. FSU


    TD/TOS just banned any opening spread that includes short calls in NKLA.
    HomelyWizzard likes this.
  5. It's an opinion, you're welcome to your own!
  6. S2007S


    I'm probably wrong on this but how is there a $10k interest charge for 3 days?

    Isn't this interest divided by 360 and multiplied by 3 days??
    athlonmank8 and guru like this.
  7. Here4money


    Are you satoshi_notmemoto?
  8. No, are you?
  9. FSU


    Assuming the stock at 65, that's 65 x 3.60 or $234 per year (per share) divided by 365 so .64 per day or $64 per 100 shares (or one assigned call). So that $192 for 3 days. So if he was assigned on 52 calls it would be about $10,000.

    Note that the short rate now is over 800%
    Atikon likes this.
  10. newwurldmn


    What’s your reasoning for your opinion?
    #10     Jun 23, 2020