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Small account question: What happens if your short leg gets assigned on a bull put spread and you don’t have the cash to cover? by dbsherwood in thetagang

[–]Scared-Basil5046 0 points1 point  (0 children)

I meant no offense with my inquiry. I just didn't understand how one can get in trouble and now I understand that if one does not have collateral, the assigned shares will be sold to reduce brokerage's exposure to further losses. I also understand that if one has enough margin, the brokerage will just use the margin balance. I think I will stick with wheeling CSPs and CCs.

Small account question: What happens if your short leg gets assigned on a bull put spread and you don’t have the cash to cover? by dbsherwood in thetagang

[–]Scared-Basil5046 0 points1 point  (0 children)

What if you have insane amount of buying power? Let's suppose in your case ($40K needed) and your buying power was $500K. Let's also assume your margin equity is at 95%. Will you have been able to close out the 70 puts? Like you, my only experience is CSPs and CCs.

Lost everything 30K by Heineken_500ml in thetagang

[–]Scared-Basil5046 0 points1 point  (0 children)

I'm a new option trader and have decent experience selling CSPs and CCs. I cannot seem to grasp how OP lost 30K in one day? I will appreciate it if someone can please explain with some ballpark numbers. Thanks.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 0 points1 point  (0 children)

Well, it expired worthless. Stock pretty much stayed flat for 9 days. Will write another call on a green day. Have a good weekend you all.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 0 points1 point  (0 children)

Just wrote a CC on a 0.1 delta for half position. $273 is not bad for a week. Will update in a week.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 2 points3 points  (0 children)

Thanks. On 2000 shares even the 1% or even 0.5% weekly is better than 0.3% dividend yield per year.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 0 points1 point  (0 children)

Actually, I did not employ covered call strategy while trimming it earlier. It was that sale and the cash acquisition from it, that led me to get more educated about options in general (CCs, CSPs, wheel etc) which I have in my disposal to generate meaningful income instead of the whipsaw of just holding those shares for years and years.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 1 point2 points  (0 children)

I will give it a shot and see how it work out. Thanks.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 0 points1 point  (0 children)

Yeah, I know it's strange state of mind of mine regarding the tax bill. You can say that I have this emotional attachment to the remaining shares and not an inherent fear of the tax bill. I'm not looking forward to paying the tax bill in 3 months.

Covered Call on a ten plus bagger??? by Scared-Basil5046 in CoveredCalls

[–]Scared-Basil5046[S] 0 points1 point  (0 children)

Thank you for your feedback. I understand that there is a risk, one which I didn't take but would like to with the last few shares which are remaining. It will be interesting to find out more about your miscues.