I had a covered call assigned over the weekend where the stock closed below the strike on Friday. Granted it was only $.06 below the strike, but it still doesn't make much sense (or is it cents) to me.
Did it go ex-dividend the same day?
If I do a covered call, if it's going to be close and I don't want to get rid of the stock, I'll buy back the call or roll it whichever makes more sense to me.My brokerage has a rule that they will exercise any option that is in the money even if it's $0.01. So anything that is close on the Friday expiration I either close it or roll it. I've been burned a couple of times where I didn't think it would reach my strike price and there is a spike in the last 30 minutes.horb
ROIC: No ex-dividend, no spike at the end of the day, but the stock did rally from $17.30 to 17.50 before closing at 17.44 on Friday.Stock closed $.06 below my strike. Go figure.I had an order in to close the position earlier in the week, but when it dropped below my strike didn't re-enter the order.Oh well. Maybe I'll get a chance to re-establish the shares lost below 17.50. Really didn't want to lose them.Also, not all contracts assigned.John
I'm not sure what doesn't make sense ( cents). Maybe they bought insurance ( your put)or it was part of a multi legged strategy. You have a couple of options. You can immediately sell it, you can wait for a little recovery then sell it, or you can keep it. One of my criteria when selling put options is to make sure it has a 75% chance or better of expiring worthless. And it works out about 25% of the time I am " put " the stock. I usually wait a few days, the stock recovers, I sell it for a little profit. Granted this has been an up market. Anyway my annualized is about 20%, and I am pretty happy with that.Also I trade in an IRA account so taxes are deferred. There are downside protections for put options as well. Happy Hunting
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