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RollTheDiceFollowYou t1_ja9ky8k wrote

I am waiting for the day someone screws me by executing an early exercise of the covered calls I sell.

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suasposnte187 t1_ja9lhz9 wrote

They are not screwing you, they are giving you the full value of the option before the option has expired.

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Thguru t1_jaargux wrote

Woho Woho I didn’t come to wsb to find logic being spit out

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SokarDaGreat t1_jablqh2 wrote

You didnt lmao, it only works out in your favor if the shares you have as collateral against the covered call are above your cost basis. If you are down pretty good and just selling CC’s to recoup some losses and then get early exercised you sold for a loss. Then as usual the stock will run up after the assignment and youll be sitting there with your dick in your hand and the shitty premium.

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Camel_Sensitive t1_jac0tdx wrote

This has nothing to do with the fact that you received free premium and can buy the stock again. Peak WSB's.

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SokarDaGreat t1_jac1tlr wrote

Then you make a wash sale if its below your cost basis. Peak wsb. Stfu

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professor_jeffjeff t1_jab96d4 wrote

Even if they do, assignment is still random. There technically isn't another specific individual who bought your specific contract; they all go into a pool and there's some system that determines who actually gets assigned.

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Drivesabrowntruck t1_ja9m584 wrote

You must of missed when $F announced the DIV. Lotta guys got exercised early for ex-div

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CheeseSteak17 t1_ja9vjoh wrote

The stock also dropped by the dividend value that day, so it was net neutral. The special dividend was accounted for in option strikes. As a seller of both puts and calls that week, it was pretty meh.

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Drivesabrowntruck t1_jaa1zcs wrote

The special dividend wasn’t accounted for, before those options were written, so Theta was already priced in. Short sellers have to pay the DIV on shares shorted, so they took a hit on the strike price they borrowed at, if not hedged

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CheeseSteak17 t1_jaa42i5 wrote

All options had the strike lowered by 0.65, which accounts for the special dividend.

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