short straddle, what if expires ATM

[cqm]

Short 1 35 Call
Short 1 35 Put

in an off chance scenario, XYZ expires at 35


both calls are less than .01 ITM and expire worthless?

just curious, not placing bets on that

 

[newwurldmn]

You may or may not get assigned. You won't know until Monday morning. Some assignments may cancel out some will not.

 

[nazzdack]

Quote from cqm:
----Short 1 35 Call
----Short 1 35 Put
----expires at 35
----just curious....

You have 4, count'em four, different exercise scenarios to consider. :eek:

 

[cqm]

Quote from nazzdack:

You have 4, count'em four, different exercise scenarios to consider. :eek:

what are you even talking about

there are two contracts, same strike, same expiration date

 

[nazzdack]

Quote from cqm:
----what are you even talking about...

1) Well, since you aren't "placing any bets on that", what does it really matter?
2) You can be exercised on:.....none, one, the other one OR both, which is similar to none as long as you haven't hedged elsewhere.

 

[cqm]

Quote from nazzdack:

1) Well, since you aren't "placing any bets on that", what does it really matter?
2) You can be exercised on:.....none, one, the other one OR both, which is similar to none as long as you haven't hedged elsewhere.

re: 1) I always plan to close before expiration. But with strangles sometimes both will expire OTM and you can just ignore it. Now I wanted to know if it was possible for the same thing to happen to a straddle

re: 2) ah yes of course. I didn't know thats what you were getting at

 

[nazzdack]

Quote from cqm:
----with strangles sometimes both will expire OTM and you can just ignore it.

1) To ignore any option(s) is bad.
2) It's better to offset the expiring position sooner when the premiums get "teeny" and roll it into something with more juice.

 

[johnnyc]

Quote from cqm:

re: 1) I always plan to close before expiration. But with strangles sometimes both will expire OTM and you can just ignore it. Now I t

you can still get assigned on an OTM position, safest bet is to just close it out

 

[spindr0]

Quote from cqm:

Short 1 35 Call
Short 1 35 Put

in an off chance scenario, XYZ expires at 35.. both calls are less than .01 ITM and expire worthless?

just curious, not placing bets on that

Decisions to exercise are made during the day when price isn't at the strike and when people are using that exercise to cover other positions. So AFAIK, you could be assigned despite the favorable expiry. Therefore, why would you take any chance whatsoever with pin risk?

 

[atticus]

Quote from cqm:

Short 1 35 Call
Short 1 35 Put

in an off chance scenario, XYZ expires at 35


both calls are less than .01 ITM and expire worthless?

just curious, not placing bets on that

Nothing, as long as you don't shart. If you do, and the stock pins.... you achieve time travel.