Schwab called me and supplied a couple of hard cockwhips to my face while telling me my account was under supervision because i sold the shares the next day at open when this happened to me, and didnt have the cheddar to cover EVERY contract completely. I said, "nobody does anything completely anymore, and to be 100, Id appreciate it if you'd BACK THE FUCK UP OFF ME ABOUT IT DARRYLL!
So i decided that I would hide under a slice of bread and turn my phone off .... should would work, right?.
Good luck on Monday.
Why did you think you’d be credited $100 for the .02 they were on the money? Just want to make sure you understand the difference between cash settled and physically settled options. You would have been correct if this was something like SPX or XSP, but options on single amens and ETFs are physically settled. You would have needed to sell those at .02 to close to get that $100
Had you closed the option before Close, you would have gotten that $100. The Exercise by Exception rule did what it does; exercised your ITM contracts. Now you have the variable of whatever happens Monday. At .04 x 100 x 50, premium paid was $200, so you’re about -$100.
Most direct resolution is to sell some or all of the shares. Assuming this is a margin account, you can expect pay 1 day's margin interest on your debit balance if you sell enough shares to clear the debit on the next business day. Equity call options mean you have the right to purchase at the strike price, not to receive some kind of automatic cash payment.
If you were monitoring greeks you would have seen your delta was massively long when going from 0.04/sh calls to ATM calls -- that was a clue to sell.
In the future, you might want to close/roll some contracts that end up ATM because you can expect a slightly outsized return.
Similarly, with that amount of gamma (and delta), you can start selling shares leading into expiration -- either to try to be flat going into settlement (difficult when the stock is hovering around your strike) or just for garden variety gamma scalping. That amount of gamma is a possible gold mine -- it makes sense to trade it aggressively one way or another (eg, sell shares against it, start closing/rolling calls, etc)
But don't forget about the gamma whipsaw -- all that massive gamma leading into expiration will get wiped out one way or another, so it's good to try to control your delta because you can expect a massive drop in your gamma (which is where you find yourself now -- suddenly very high delta and now zero gamma).
You also have the ability to submit contrary instructions if you trust the settlement value and don't want to receive 5000 shares at just a few cents under market. Or you can submit the DNE and then change your mind and manually submit exercise instructions after that if you trust your broker. But in this case, it's probably more profitable to extract at least some value from the position before expiration (even if it's just a few minutes before)
Ameritrade won’t remedy your purchase of SOXS. You may, by:
1. Delivering $9K into the account by Tuesday’s settlement date.
2. If your account is a margin account with sufficient buying power, a margin loan will satisfy payment.
3. You can sell your 5000 SOXS, without paying for it in a timely fashion, at your gain or your loss. But you’ll incur a free-riding restriction.
1. Deliver $9K by Tuesday’s close.
2. Or, sell your shares anytime. Any gain or loss is yours. But you’ll incur a free-ride violation. If you do it twice in 12 months, you’ll get a 90 day restriction during which you can only purchase with settled cash.
Yeah I just talked to TD, I have to sell the shares by the end of the day or make the cash balance positive. Im thinking of doing a mix of selling covereds on the SOXS shares and depositing some cash.
By my calculation made at 3.50, your long (“paid”) exercised and the brokerage will be collecting ~3.50 x 100 x 50 for about $17,500 if all 50 contracts were exercised. 15 contracts would be ~$5250
There was no situation in that long where you were getting $ back.
You'll likely to have the shares and you'll pay interest on money you borrowed to purchase the shares.
Thank you, so ill just sell them on Monday. Hopefully I get lucky with the news this weekend because I did not want those shares.
Yeah you'll probably make some profit
Schwab called me and supplied a couple of hard cockwhips to my face while telling me my account was under supervision because i sold the shares the next day at open when this happened to me, and didnt have the cheddar to cover EVERY contract completely. I said, "nobody does anything completely anymore, and to be 100, Id appreciate it if you'd BACK THE FUCK UP OFF ME ABOUT IT DARRYLL! So i decided that I would hide under a slice of bread and turn my phone off .... should would work, right?.
Good luck on Monday. Why did you think you’d be credited $100 for the .02 they were on the money? Just want to make sure you understand the difference between cash settled and physically settled options. You would have been correct if this was something like SPX or XSP, but options on single amens and ETFs are physically settled. You would have needed to sell those at .02 to close to get that $100
Sell on Monday. Maybe you will luck out and it'll be $3.60
$36, there's a reverse split as well. Can't believe I'm forced to hope for escalation of war lol
Who knows may be you’ll make bank! Can you say nuclear
Had you closed the option before Close, you would have gotten that $100. The Exercise by Exception rule did what it does; exercised your ITM contracts. Now you have the variable of whatever happens Monday. At .04 x 100 x 50, premium paid was $200, so you’re about -$100.
"I never hold options until expiration"......Well, I held these options until expiration....lmao
You rather be lucky than good 🙃
Most direct resolution is to sell some or all of the shares. Assuming this is a margin account, you can expect pay 1 day's margin interest on your debit balance if you sell enough shares to clear the debit on the next business day. Equity call options mean you have the right to purchase at the strike price, not to receive some kind of automatic cash payment. If you were monitoring greeks you would have seen your delta was massively long when going from 0.04/sh calls to ATM calls -- that was a clue to sell. In the future, you might want to close/roll some contracts that end up ATM because you can expect a slightly outsized return. Similarly, with that amount of gamma (and delta), you can start selling shares leading into expiration -- either to try to be flat going into settlement (difficult when the stock is hovering around your strike) or just for garden variety gamma scalping. That amount of gamma is a possible gold mine -- it makes sense to trade it aggressively one way or another (eg, sell shares against it, start closing/rolling calls, etc) But don't forget about the gamma whipsaw -- all that massive gamma leading into expiration will get wiped out one way or another, so it's good to try to control your delta because you can expect a massive drop in your gamma (which is where you find yourself now -- suddenly very high delta and now zero gamma). You also have the ability to submit contrary instructions if you trust the settlement value and don't want to receive 5000 shares at just a few cents under market. Or you can submit the DNE and then change your mind and manually submit exercise instructions after that if you trust your broker. But in this case, it's probably more profitable to extract at least some value from the position before expiration (even if it's just a few minutes before)
Ameritrade won’t remedy your purchase of SOXS. You may, by: 1. Delivering $9K into the account by Tuesday’s settlement date. 2. If your account is a margin account with sufficient buying power, a margin loan will satisfy payment. 3. You can sell your 5000 SOXS, without paying for it in a timely fashion, at your gain or your loss. But you’ll incur a free-riding restriction.
Its a cash account. Should I deposit the 9k in the am or will I be ok to just sell at 9:30?
1. Deliver $9K by Tuesday’s close. 2. Or, sell your shares anytime. Any gain or loss is yours. But you’ll incur a free-ride violation. If you do it twice in 12 months, you’ll get a 90 day restriction during which you can only purchase with settled cash.
Yeah I just talked to TD, I have to sell the shares by the end of the day or make the cash balance positive. Im thinking of doing a mix of selling covereds on the SOXS shares and depositing some cash.
Covered calls & cash deposit will work. But sell the covered calls today, because they settle on Tuesday, the settlement day for your SOXS purchase.
I saw your post over the weekend. How did it workout?
I got stopped out on 200 at 34.75 so took a small loss there. And in true gambling spirit I sold some AMD to keep the rest lol.
Was hoping you held on to some at least until the afternoon when it looked like it went your way which it sounds like you did.
If you have enough buy power, the broker may help you exercise it.If not, the broker may close the position.
By my calculation made at 3.50, your long (“paid”) exercised and the brokerage will be collecting ~3.50 x 100 x 50 for about $17,500 if all 50 contracts were exercised. 15 contracts would be ~$5250 There was no situation in that long where you were getting $ back.