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This is no story.!!! It actually happened. I got the notice of assignment
Thursday @8:30 am. The strike price was 32.5 the stock price was 31.25. I
have received several explanations but quite honestly I still don't get it.
I have had stock assigned before but NEVER prior to expiration date. All I
know is the stock was assigned and I simply went out and bought it back at
30 1/16 . I intend to write new call's early next week.
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> From: THE DOCTOR <droex@xxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: OPT-Assignment
> Date: Friday, July 17, 1998 6:31 PM
>
> First there is no way possible that an option can be assigned "late in
the day" assignment occurs
> prior to the opening for purposes of notification.
>
> Why would someone exercise a call a point and half out of the money.
>
> Either the stock is somehow unavailable due to some tender or takeover
situation and there is nothing
> like that in the current US equity markets that would merit a OTM
assignment or
>
> The person who exercised the long call is moron. Stupid exercise does
occur occasionally, but any
> good brokerage house would advise the customer against it. Of course
with the growth on internet
> based trading fewer people get advice or
>
> There is some huge piece of information missing from this story or
>
> The whole thing is fiction.
>
>
>
>
>
> mundi1@xxxxxxxxxxxxx wrote:
>
> > On 07/17/98 07:49:26 you wrote:
> > >
> > >Rule for windfall profits: don't question them, take them.
> > >
> > >Now the other party maybe thought there would be a big overnight move
for
> > >some reason, and wrongly anticipated it...
> > >
> > >Gwenn
> > >
> > >
> > >pressdl a écrit:
> > >
> > >> Any explanation would be appreciated. I had options assigned late
> > >> yesterday. That is the first time I had options assigned prior to
> > >> expiration. That was a surprise --but not nearly as much as the fact
the
> > >> option was assigned with the stock still 1 1/4 pts below the stock
price.
> > >> Any suggestions as to why someone would do this??
> > >>
> > >> I merely bought the stock back and wrote calls for the following
month.
> > >>
> > >> Dave
> > >
> > >
> > >
> > >
> > >
> >
> > The is actually quite a few reasons for this....one may be that the put
price (buy side) may have
> > been at a level where the conversion may have been attractive, 2> if
the interst rate + carry- div
> > > put price it would have been quite profitable, 3. The buyer may have
needed the long stock to
> > cover a call in his short stock...there could be numerous other
reasons...hope this helps...David
> > Gennrich Mundi
>
>
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