Odds and ends

GOOG - A trade that I have in GOOG included Feb 460 puts. Although the rest of the trade was favorable, and overall I had a profit, I was assigned 300 shares at that price. Obviously, I did not have $138,000 to pay for this long calls that were assigned to me. This is a NOT A PROBLEM!!!!! Your broker will probably give you 'til the end of the day for you to handle the position some how. Obviously, if you had been NAKED (only these short puts), you'd be in trouble (if the broker had let you trade these). OptionsXPress would have not allow me to do this short puts without protection.

¿So, what did I do??

First, the Feb 460 put options are exercised for me. So this is equivalent to buying back the options for $0, essentially balancing out the debit of $138,000 of the shares I now own. So ALL YOU have to do is SELL the stock you now own, that IS ALL. No swet, no problems. In fact, the time value left before expiration, is yours to keep. The BUYER of the puts has given up the time value, and you are the beneficiary.

To record what happens on assigment, this is what you do:


1. BTC the assigned options for a "0" cost (this is done by your broker, but you may enter it as a BTC in your Platinum trade). Since I had 3 Feb 460 puts (91.6/92.4). If I had to buy these options in the open market, they would cost me $27,720.
2. I am long 300 shares of GOOG, as though I had bought the stock at $460. In Platinum, enter that as a long in the entry page for the trade.
3. I sell the shares at the opening at the current market price: $368.24.
4. The difference between 2 and 3 is my loss in this trade => ($460-$368.24)*300=$27,528.
5. However, since I avoided having to pay for the short option $27,720, the difference between item 4 and item 1 is in my favor: $27,720 - $27,528 = $192.


Commissions:

1. Assigments: there are no commissions on this action. You SAVED yourself the commission related to the buying back the short puts. That is an additional $15-$20 savings. Obviously, if you are short 10 or 20 contracts, the savings are bigger.
2. The sell of the stock. My commission here was $5.95, substantially less than the commission above.


What you do with your long puts and calls is up to you from here. The Assigment per se had little impact in the final analysis, but it IS in your favor.
If you want to avoid assigment, simply do the rollover 1 week before expiration, but if you get assign, don't worry, the option buyer just gave up the some primium (if not a lot) in your favor.

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I entered the Condor portion of my trade on SBUX succesfully, but the additional long straddle is still in the works.

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I have been asked about the "COMBO" xpread entry page in OptionsXPress. Using this form you can enter a collar (buy a put and pay for it by selling a call). I am sure that you could use this to close existing trades, but I caution you to read the instructions and ask the OptionsXPress people for guidance. They are best qualified to explain to you what is in their site.