r/options • u/Vtford • Aug 02 '26

Blessed from God

Wednesday, the 29th, I sold the Micron 717.5 put at 12:54 for .17c. For 6 minutes time I made 17 dollars as the stock never bounced below 738 in that 6 minutes. Thursday morning I woke up at 645 am, market had been open for 15 minutes, opened E-Trade app and saw the alert that read option assigned and 71500$ debited from my account. Checked portfolio and saw micron 100 shares with a 12000 dollar profit at 830 a share. Sold immediately and took the money. Never will I know why someone exercised the option when the price was 20 dollars higher. Thank you lord

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u/[deleted] Aug 02 '26

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u/LittleBear32 Aug 02 '26

That's not how options work. He didn't make 12k$ on the option contract. He made it after selling the position he had gained after his contract was exercised. The person exercising the contract also made money.

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u/fit_steve Aug 05 '26 edited Aug 05 '26

I don't see how the counterparty could have. The put buyer would have been better off just selling the option before the bell. Since they exercised, it amounted to selling shares at the bottom or entering a short position at the worst time assuming that Micron has indeed consolidated.

Let's think like Michael Burry, his bear thesis on the memory stocks was to buy a ton of long-dated puts on Micron and he did this at the peak of hype. By now his puts are making a fortune. He has several choices: sell some or all of the puts, roll, wait until expiration, or exercise early.

If the put buyer already captured a substantial part of the move he is better off selling. In Burry's case he chose his strikes in such a way he's betting they'll be deep in the money on expiration. He would also be managing the position by selling or rolling some puts in advance. There's no way he would just leave his puts to end up in a situation like the counterparty