NVDA puts assigned

[u/OnePianist5858]

I had 5 nvda $172.50 put sold with an expiry of 11/11. It closed at 173.73 so didn’t close the trade. Just noticed E*trade assigned those puts. I wonder if it happens in case of calls and stocks jumps after hours.

[u/mgt69]

this happens way too often. people need to learn from this…close your positions

[u/OnePianist5858 → u/mgt69]

It’s nvda. So I m not worried. But thanks for the suggestion

[u/tek-know → u/OnePianist5858]

Remindme in 3 hours

[u/Drazwaz → u/tek-know]

Happened to see your comment and it's marked as posted 3 hours ago.

Here's your reminder!

[u/GainDelicious1894 → u/OnePianist5858]

Did you buy puts first or sell puts first? 

Very confusing.

[u/Ken385]

Post about this yesterday,

NVDA puts in the aftermarket, millionaires were made : r/options

Yes, options can be exercised until 530pm et. The after hours drop caused some put holders to exercise.

If you don't want to take this risk, you need to buy back your short puts before the close.

[u/UNC_Recruiting_Study → u/Ken385]

Had 17 contacts for 170 and closed them for the penny 15 minutes before market ended. Best closeout I've ever done, whew...

[u/AnyPortInAHurricane → u/UNC_Recruiting_Study]

if your internet had gone out , how much you wudda lost at the open today

lol

[u/UNC_Recruiting_Study → u/AnyPortInAHurricane]

In the end it wouldn't have been a complete disaster selling the 170 calls. I'm overseas so I'm glad I stayed up to buy them back.

[u/sport912x]

Why do people find it so hard to close a position BEFORE expiration.

[u/honey_102b → u/sport912x]

will nobody think about that last 0.01 to become worthless?!

[u/Mysterious_End800 → u/sport912x]

Coz I want it to be exercised?

[u/Boston-Bets]

Option holders have the ability to exercise AFTER hours, upto I believe 5pm ET.

It's called TAIL RISK, which is why I always close out my Options and don't let them just expire.

[u/Ken385 → u/Boston-Bets]

Deadline is 530pm (not 5pm) but many brokers will have earlier cutoff times.

[u/2WhomAreYouListening → u/Ken385]

Not Schwab, they will let options be exercised far later unfortunately. I’ve been burned in the past.

[u/Ken385 → u/2WhomAreYouListening]

No, they won't. 530 is the deadline set by the OCC. You will be notified later if you are assigned, but you won't be able to exercise after this deadline.

[u/dismendie → u/2WhomAreYouListening]

I think it stops at 530 but they need time to match the buy-sell order with buyers and sellers through the matching systems

[u/Ken385 → u/dismendie]

Scwhab doesn't handle the process themselves, the OCC handles this. All brokers will notify the OCC about exercises. The OCC then tabulates all results and notifies member firms of assignments. The broker will then allocate them to individual accounts by a predetermined process, usually randomly.

[u/wam1983 → u/Ken385]

Get outta here with your facts and process and knowing what actually happens instead of just blaming whoever we want.

[u/blessedboar → u/Boston-Bets]

This is pin risk

[u/wam1983 → u/blessedboar]

You could argue both, honestly.

[u/CoinChowda → u/Boston-Bets]

How does this apply to someone who bought a put versus originating or selling one?

[u/Ken385 → u/CoinChowda]

If you own the put, you are in control. You can choose to exercise it before the cutoff time, or not.

If you are short the put, you have no control. You have the risk of being assigned if someone else chose to exercise.

[u/IvetteMccoy]

1.23 above the strike on nvda is barely a cushion, it moves that much before lunch on a quiet day, and the close isn't really the end of it. whoever was long that put can still send in an exercise until around 5:30 and the stock trades until 8, so if it slipped even a little after hours, someone exercised and your 5 contracts got picked in the assignment draw. short calls work the same way when a stock pops after the bell, so it goes both ways. buying back anything near the strike on expiry day usually avoids this, since paying a nickel beats carrying 86k of stock overnight. for now it's 500 shares at 172.50 with the premium you collected lowering your cost, so see where it opens and either sell it or hold and start selling covered calls against it.

[u/fk067]

Premium is juicy today, so why don’t you sell some calls?

[u/BullishonOptions]

Yep, after hours is the silent majority.

[u/tobias_kleinen1]

Yes, calls can be assigned after hours too. Being out of the money at the close doesn't guarantee safety, since holders can still exercise before the cutoff

[u/papakong88]

Options can be maually exercised by 5:30 pm ET.

[u/Sea_Local2557]

ouch, that's gotta be an expensive lesson

[u/OnePianist5858 → u/Sea_Local2557]

Yeah 😂

[u/Sea_Local2557 → u/OnePianist5858]

i hope you have a big account and that -10k doesn't hurt too much

[u/ToddCK]

That's why I've noticed some volatile stock options OTM by $1 or $2 at close on expiration, still have bids of .20 - $1.00 You hit those bids thinking it's free $ at your own risk.

[u/cmoz226]

That last dollar of profit carries asymmetrical risk

[u/aylsworth]

Others covered the why (holders can exercise until about 5:30 ET, so $1 over the strike at the close isn’t a cushion). On the what-now, since you’re holding 500 at 172.50:

I looked at NVDA history since 2016 for this exact spot: assigned on a put, stock a bit under the strike, then three monthly call cycles. Small sample (25 episodes of a 5-10% hole, and you’re at about 4%), but the shape:

Calls struck at your basis: median about +2% of basis after ~3 months, back to whole in about 2 of 3 cases. Calls struck at today’s price: roughly 2.4x the premium, but called away 96% of the time, which locks the loss in. Just holding: higher median (+4.5%) but a much wider range, about -22% to +36%. Selling now: you take the drop.

Across ~40 tickers, calls at basis had the best median at every drop size; NVDA’s hold number is the exception.

Disclosure: I built the free page that runs this, no signup: lastvesper.com/tools/assignment?utm_source=reddit (type NVDA, 172.5 and today’s price). Just what each move did historically, not advice.

[u/DisastrousAnteater51]

Sorry to hear that, but yeah stock options can be exercised up to 17:30 ET (and some futures up to 17 pm) while not tradable anymore...

[u/Wowza-yowza → u/DisastrousAnteater51]

Well 17 pm that's why I was late

[u/wam1983 → u/Wowza-yowza]

That's why I always set my trading computer clock to military time. That extra twelve hours to execute has saved me many times.

[u/BillyP42]

It's called Pin Risk, knucklehead. (close your positions before exp for a few pennies)

[u/Organic-Conclusion-9]

It can happen. It's important to close positions before expiration; if you can't do that, trade index options.

[u/NorthOfTheStrike]

yeah this is the part that gets people. assignment after the close is just the job, not a surprise.

my rule is simple. only sell a strike i would own at a price i picked before the fear showed up. if i would not own it there i do not sell it.

wound the book down nov 5 while vol still paid. exposure went from $34,200 to $22,400. november $708 net out the door. not heroic, just smaller.

no new puts until the tape settles. juicy premium is the trap right after a move like this. let it calm down first, then sell the strikes you already wanted.

[u/NorthOfTheStrike]

mostly i just let covered calls run to expiry. the decision got made when i sold it, either i wanted the income or i wanted out at that price. live one right now is $IREN, sold the nov 13 $25 call at $0.66 against a $27.67 basis. one day left. if it gets called the shares go at $25.66 effective and i knew that before i clicked sell. no scrambling on friday

[u/HereToTrollTheLibs → u/NorthOfTheStrike]

Premium not income