[ASK] Credit Spread with ITM on sell option

Quote from RichardRimes:

so just to clarify. IF I were on the other side of the trade I would have exercised thru my broker those TLT calls the previous day...then during the nite the OCC randomly assigns the calls? ok I get it. thx

FYI to all...so if you have short calls on a high div stock you WILL most likely be exercised even when there seems to be pretty good extrinsic value remaining. This happened two weeks prior to expiration.
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It's all about the dividend payment, i.e. ex-dividend date. Always check ITM calls when the stock is about to go ex-div.

And, yes, assigments happen overnight hence you don't find out about until the next day. This is where the whole early call exercise prior to ex-div and shorts being responsible for the dividend comes from.
 
Funny thing my calls were NOT ITM at the time of assignment thats why I was so surprised but obviously close enough to the money that warrented assignment by someone.
 
Quote from RichardRimes:

Funny thing my calls were NOT ITM at the time of assignment thats why I was so surprised but obviously close enough to the money that warrented assignment by someone.
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The maths behind early call exercise are pretty simple. If the dividend is more than the cost of carry to expiry plus the price of corresponding put then the call will be exercised.
 
Quote from ANCOLL:

Dear Trader,

A few ago, I buy 5 call option PVH @60 $2.90

but it went down to 57.10 and I lost with those option,

Then to recover my lost, I open another position which brought me to credit spread I open sell 5 call option PVH @55 and receive
$6.20 - $3.70 = $2.5 per option, enough to cover my lost
(picture attached)

My question is,
even though I can cover my lost, is there any chance my sell option be exercised? because my sell option is In The Money bracket.
If it happened, I will lost more from my own credit spread.
but i am thinking it's still on sept 07, it's still safe.... in my opinion.

So i need comment and advise from other option traders,

Thanks before
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you better invest some time in option education.

Looks like you have not got the basics down pad; you will have a hard time dealing with more advanced issues.

This option game is complex, there are traps everywhere, so as opportunities, if you play it right.

Here's one place you can start:
http://www.iseoptions.com/education/webinar.aspx
 
Quote from Tums:

you better invest some time in option education.

Looks like you have not got the basics down pad; you will have a hard time dealing with more advanced issues.

This option game is complex, there are traps everywhere, so as opportunities, if you play it right.

Here's one place you can start:
http://www.iseoptions.com/education/webinar.aspx
More...

Thanks for the link, Turns
I will come back after i learned it
:)
 
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