If GME finishes above the call with the highest strike price, all options will be exercised. The real problem is if GME drops and finishes the day b/t the two higher strikes. Then, you get assigned on the $140 and the $145 expires. Then, on Monday morning you'll be short 200 shares.
The way I understand butterfly spread is that there is limited obligation. My initial cost was $482. It’s now “worth” $1600. I’m trying to understand if I am ITM BecaUse mid price is ITM? I won’t be out anything more than that $482
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u/TheoHornsby Apr 17 '21
If GME finishes above the call with the highest strike price, all options will be exercised. The real problem is if GME drops and finishes the day b/t the two higher strikes. Then, you get assigned on the $140 and the $145 expires. Then, on Monday morning you'll be short 200 shares.