Option assignment with IB

B

Broken

Hello everybody,
I apologize in advance if the question is a bit simplistic but i was wounder how does interactive broker deal with option assignment since i recently switched brokers.

Lets say i do a vertical spread on google 1x sell 800 1x buy 805 call.
I assume if google goes to 810 tommrow then they will use my 805 call to deliver the underlying stock. But what would happen if they stock is trading at 803 and i get assigned? since i dout il have 80300 $ in my account.

thanks
 
Quote from Broken:

Hello everybody,
I apologize in advance if the question is a bit simplistic but i was wounder how does interactive broker deal with option assignment since i recently switched brokers.

Lets say i do a vertical spread on google 1x sell 800 1x buy 805 call.
I assume if google goes to 810 tommrow then they will use my 805 call to deliver the underlying stock. But what would happen if they stock is trading at 803 and i get assigned? since i dout il have 80300 $ in my account.

thanks
More...

you exercise your call, IB loans you the money. and you pay the difference which will be no more than 500. plus fees.
 
You should call them and ask. You don't want to get in a situation of auto liquidation on one leg.

1245
 
I would ask IB but I suspect you would be short the stock which they would liquidate at market once trading begins.

I was called on a short leg in a long (SPY) butterfly prior to the last monthly expiration, but I had more than sufficient funds to cover it so I had the luxury of waiting and liquidating at a profit. It was a reminder to always watch all positions so that I would never have choice taken out of my hands.
 
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