This video states that 'it costs you nothing' to short stock. Be aware that some brokers charge a fee when you hold a short stock position – and if the stock is difficult to borrow, the fee can be very stiff.
exercise assignment early assignment options trading
Will there be a follow up to your Rookie’s Guide To Options book that will go over more advanced concepts? I’m thinking to describe about various issues in managing a monthly income portfolio.
Writing a book is a big project and I have no plans for it at this time.
But, your comment provides an opportunity to discuss the concept of monthly income, and it’s the subject of tomorrow’s (9/7/2009) blog post.
I thought I would mention a situation which happened to me. I was short puts at the 2.5 strike on a high IV underlying. I was not watching the market the day the puts were exercised, but the day before spreads on the puts were pretty monsterous. I was quite surprised to receive the assignment notice (and have a hole on my trading screen). There was no problem as a result of that particular trade. It did inspire me to unwind some unrelated spreads after I got to thinking about the disasterous margin calls they could create.
Glad your incident was harmless.
An update on the poll shows that 70% of those who voted and who received assignment notices prior to expiration had ‘no problems.’
Thanks for sharing.
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