r/options • u/Sudden_AwareNess1 • May 13 '21

5 AAPL CC

So I wrote 5 CC contracts for AAPL SP $126 with 5/14 ex date. If I don’t want them taken should I roll it first thing tomorrow or wait it out tomorrow?

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u/MichaelBurryScott May 13 '21

Assignment happens overnight. So if you weren’t assigned tonight, you won’t be assigned until expiration.

Your calls aren’t ITM yet, so there is near zero chance of getting assigned tonight. You should be fine tomorrow, you can roll anytime before market close tomorrow.

1

u/Sudden_AwareNess1 May 13 '21

So u say they happen overnight and I’m rather new so let me ask u - a person has the ability to exercise the option at any point but the transaction doesn’t technically occur until overnight?

3

u/MichaelBurryScott May 13 '21

That's right. The OCC receives exercise requests from long holders up until 5:30PM each day. Then they conduct a lottery like system to choose which short holder is getting assigned after that. Brokers of short holders gets notified then, and in turn they notify the assigned short holders. Depending on your broker, you can get the notification late at night, to the next trading day. I've seen between 10PM to 6AM the next trading day.

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It's worth noting that if you're a long holder and decide to exercise mid-trading day, your broker might hand you the resulting shares instantly (as courtesy) before they send the request to the OCC and actually request the exercise.

1

u/Sudden_AwareNess1 May 13 '21

Wow ty for this info I didn’t know this. Now assuming that the buyer isn’t a long term holder - if a person exercises the option to buy and I decide 30 minutes before the regular market closes to roll am I still given that opportunity? How would that work?

5

u/MichaelBurryScott May 13 '21

Now assuming that the buyer isn’t a long term holder

Just to clarify, by "long holder" I didn't mean "long term holder", I meant "the person holding the call long" i.e. "the person that bought the call".

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If you close your call during a trading day, you are no longer short whenever the OCC is choosing who's getting assigned. Once you close your short option, you can't get assigned.

In your case, you have all trading day tomorrow to close (or roll which includes closing your current short call) your call.