Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Stock assigned to a covered call
Old 02-23-2021, 02:00 PM   #1
Thinks s/he gets paid by the post
twaddle's Avatar
 
Join Date: Jun 2006
Posts: 1,703
Stock assigned to a covered call

So your out-of-the-money covered call gets assigned. And then the stock dips below your strike price, like the next day.

If you've already made peace with the idea of selling, are you tempted to rebuild your position?

Do you sell some naked puts?

Do you simply repurchase?

Do you blow your farewell kisses?

Ignore this post. I'm just trying to get it out of my system. My plan is to wait for valuation to become "acceptable" again, but past experience reminds me that sometimes that never happens.

Breaking up is hard sometimes.
twaddle is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-23-2021, 02:51 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,099
These don't have to be naked puts, they can be cash covered puts since you were paid for the stock at the strike price (plus option premium).

If I was guessing the strike price was really too high, I'd do a cash covered put to get another premium, and possibly buy the stock back at the "correct price".

If I thought the price although lower than the strike price was "correct" , I'd just buy the stock and probably sell another call on it.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Covered vs. Non-Covered Shares PERSonalTime FIRE and Money 3 07-06-2014 08:25 PM
Covered Call Options Bankerwithabrain FIRE and Money 12 05-29-2008 11:02 PM
How are Stars assigned? ScaredtoQuit Forum Admin 14 01-23-2007 07:51 PM
A Decent Covered Call Play, maybe, hopefully JPatrick FIRE and Money 1 11-21-2005 12:03 PM
Covered call/naked put writing on ETFs? Olav23 FIRE and Money 8 07-15-2005 10:50 AM

» Quick Links

 
All times are GMT -6. The time now is 01:34 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.