I just got hit on early assignment (NutFlix)

The_Krakenite

The_Krakenite

Now I don't have to focus so much on how I was going to roll-out of this at the end of the month, lol.

While I know I'm supposed to be grateful for such a gift as an early assignment on my short-put, I'm just wondering if there was a logical reason for this.

The strike was deep ITM at 330, and there is no dividend, so I assume the other end was perhaps facing a potential margin-call, or simply wanted to raise some cash quick to grab some other fire-sales in today's crash and hence cashed in early.

I am just wondering if there may have been something else I didn't think of?

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Pretty much. I will wait for the panic selling to bounce, then start trading CALLs. This is the first time I've held a FAANG, and always wanted to (which is why I was shorting PUTs on them). Might as well start now. Besides, when it was selling over 700 a share I thought I'd never see the day to get it at 330. LOL!

I'm most likely going to hold onto this in the long-term investment portfolio.
 
The_Krakenite said:
While I know I'm supposed to be grateful for such a gift as an early assignment on my short-put, I'm just wondering if there was a logical reason for this.
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Not sure it is a gift. Sometimes a deep in the money sells for last than its intrinsic value. You might have been better off by buying the put back before being assigned.
 
The_Krakenite said:
Now I don't have to focus so much on how I was going to roll-out of this at the end of the month, lol.

While I know I'm supposed to be grateful for such a gift as an early assignment on my short-put, I'm just wondering if there was a logical reason for this.

The strike was deep ITM at 330, and there is no dividend, so I assume the other end was perhaps facing a potential margin-call, or simply wanted to raise some cash quick to grab some other fire-sales in today's crash and hence cashed in early.

I am just wondering if there may have been something else I didn't think of?

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Hard to say really. As a buyer of call and put options, I would have kept the put option considering it is deep in the monies. Looking at the stockchart, NFLX probably, will continue much lower. So, why exit your position when larger gains could be coming? 11 days till expiration so, a lot of time to exit. Maybe, the guy got a margin call like you said and wanted to raise cash. Most option buyers sell their options to close it out and not bother to exercise the option.
 
Professionals will exercise a put mainly for interest rate reasons. Your put was trading with almost no extrinsic value (the corresponding call is trading at 4 cents.) The 330 put is trading around 140. This means that for every put a trader has, it represents a debit balance of $14,000 that he is paying interest on. If he exercises the put, he, is now short stock (it is not hard to borrow) and will save on interest charges. If he buys the 330 call for .04, he will have the same synthetic position on as before, but will be saving on interest charges.
 
.i wonder if anybody did a calculation to see how much they have lost in stock value vs subscription from password sharing...

i would guess password sharing revenue loss is nothing compared to this god awful crash lol
 
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