About to blow up my account...help?

[prc117f]

Say you're short the put vertical. The thing goes deep ITM and you're assigned on your short put. You're still long the deeper put. The assignment results in a synthetic long call that's ostensibly worthless (long shares + long put). There is no risk to the assignment other than microstructure.

Assuming it crossed the strike price of the deeper put, it could be a few points OTM and right at expiration day or within a few days. so you are at risk at having a shit ton of stock put to your account and not enough equity to cover assignment.

 

[destriero]

Assuming it crossed the strike price of the deeper put, it could be a few points OTM and right at expiration day or within a few days. so you are at risk at having a shit ton of stock put to your account and not enough equity to cover assignment.

He's not getting assigned inside the two strikes. If so, he would likely be profitable. That wasn't the point. It was a deep ITM assignment of shares resulting in a synthetic long call.