Stock Assignment Help

D

Dgut

let me start off by saying I know I'm an idiot and I am over my head. I have been trading credit spreads for the last few weeks and I made a huge mistake.

On Friday (June 19), after the market seemed like it had lost to steam, I sold a very risky put bull spread on 250 SPY at 210.5/209.5 when the stock was trading at 11.5. I got dragged into a meeting at the end of the day. When I came back the stock had closed (according to Google Finance) at 210.89, but the after hours trading was taking a nose dive. The after hours ended up at 210.57 so OTM. On Sat I was assigned 17,900 shares of SPY.

Any suggestions on how to work this out?

How screwed am I?

Why would my broker, (Optionshouse), automatically liquidate the ridiculous amount of stock that I now have in my account? Will they really be letting my play with $3million come Monday?!

Once again, I'm a dumb ignorant newbie that shouldn't be playing with fire without fully undestanding the risk. I get it.
 
Right now the ES future is trading up 9 points. You might get lucky. You will have to meet your margin call by selling the stock. Not sure what they will do. You should call them early Monday.

Good luck...Bob
 
Yes it looks pretty good so far for OP. Just hope they don't liquidate you at the very beginning of the premarket session as the spread is still wide then ( getting information on Optionshouse liquidation procedure if better than hope though but I have no idea about their process)
 
If you have futures access you can always hedge it out right now (albeit it'll be like a 30 lot) but other than that all you can do is wait. In the future don't do this kind of stuff. Any trade that relies on "oh it'll never go there" its a bad thing to get into. Or at the least reduce the size.
 
Last edited:
If the OP is legit then the payoff should be about $25,000.

  • Assigned 17,900 SPY at $210.50.
  • I assume a margin call at market open - about $211.90.
  • 211.90 - 210.50 = 1.40 x 17,900 = $25,000


:)
 
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