Will I be assigned?

KINGOFSHORTS · Mar 23, 2009

Google at 342.46, High of 344

It could have been a an expensive lesson in pin risk/position management. But cheaper than paying for an options course

dagnyt · Mar 23, 2009

Quote from KINGOFSHORTS:

Google at 342.46, High of 344

It could have been a an expensive lesson in pin risk/position management. But cheaper than paying for an options course

BUT it was MUCH lower in the premarket.

Mark

heech · Mar 23, 2009

Quote from KINGOFSHORTS:

Google at 342.46, High of 344

It could have been a an expensive lesson in pin risk/position management. But cheaper than paying for an options course

Although I realize the OP would have lost money... I still don't see the "lesson" here. GOOG could've just as easily been at 342.46 Friday morning... there's nothing magical about today.

If you hold any kind of a short position (including an ITM naked call), you will lose money when the stock goes up. That's just something you have to be ready for when you write calls.

KINGOFSHORTS · Mar 23, 2009

Quote from heech:

Although I realize the OP would have lost money... I still don't see the "lesson" here. GOOG could've just as easily been at 342.46 Friday morning... there's nothing magical about today.

If you hold any kind of a short position (including an ITM naked call), you will lose money when the stock goes up. That's just something you have to be ready for when you write calls.

The problem is if you have a good profit take it, trying to grab the last 13 dollars is kind of silly.

forex-forex · Mar 23, 2009

shazam75 ....... Could you update us on the final result? Did you get assigned?

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heech · Mar 23, 2009

Quote from KINGOFSHORTS:

The problem is if you have a good profit take it, trying to grab the last 13 dollars is kind of silly.

True...

I don't know what his GOOG options were trading for on Thursday, but it was probably not much more than 13 dollars either. Why not close it out right then and there?

Actually for my own purposes, I'd be curious if someone has good heuristics for deciding when's a good time to take money off the table when writing options.

How do you balance the remaining time premium versus probability you'll lose?

ivanbaj · Mar 23, 2009

Quote from heech:

How do you balance the.....probability you'll lose?

I speculate.

shazam75 · Mar 23, 2009

Quote from forex-forex:

shazam75 ....... Could you update us on the final result? Did you get assigned?

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No - I did NOT get assigned!

Cheers!

spindr0 · Mar 24, 2009

Quote from shazam75:

Actually i usually don't look at what would have happen - lucky i got away from this trade - so to me there is no point to look to see what would have happen - I just think it will open higher tomorrow and I was willing to bear the loss.

Apart from the lesson that one should close out near the money options to avoid pin risk, the reason to look at it Monday AM post expiration is to familiarize oneself with the pre market trading, the wider spreads and the erratic behavior of many stocks due to the decreasing illiquidity of pre-market hours... just in case you need to close a position.

IMHO, not only should everyone be familiar with pre/post hours trading but they should also have trading approval for them. With some positions, having the ability to adjust via long or short stock enables one to lock in profits (or cut losses) without being at the mercy of having to waiting until 9:30 AM EST and getting whatever price the underlying opens at.