Hi Folks,
Thanks in advance for any help you may offer.
I am very new to the business, but like anything in my life, I've done a lot of research before opening any accounts.
One thing I haven't been able to find information on is specific reference to assignment of stock on a naked sell.
Example.
I'm looking at a stock which is trading at 17.20
17.50 put is at 2.00.
Expiration is 3 weeks from today.
Volume is decent on this stock and Open Interest and Volume are both in good ranges at this level on this particular option.
I am working with a broker who allows writing naked puts.
If I were to sell the in the money put for 2.00, how soon, if at all, could I expect to be assigned the stock at 17.50?
My thought is that if I were assigned at 17.50, actual cost to me with the 2.00 premium is 15.50. If I were assigned fairly quickly, I could possibly turn around and sell the stock or a call option on the stock for another small profit.
Does it make sense or am I an idiot?
Don't be afraid to call me an idiot if that's the case. I'm a person who likes to know where I stand.
Thanks for your candor.
tdeel
Thanks in advance for any help you may offer.
I am very new to the business, but like anything in my life, I've done a lot of research before opening any accounts.
One thing I haven't been able to find information on is specific reference to assignment of stock on a naked sell.
Example.
I'm looking at a stock which is trading at 17.20
17.50 put is at 2.00.
Expiration is 3 weeks from today.
Volume is decent on this stock and Open Interest and Volume are both in good ranges at this level on this particular option.
I am working with a broker who allows writing naked puts.
If I were to sell the in the money put for 2.00, how soon, if at all, could I expect to be assigned the stock at 17.50?
My thought is that if I were assigned at 17.50, actual cost to me with the 2.00 premium is 15.50. If I were assigned fairly quickly, I could possibly turn around and sell the stock or a call option on the stock for another small profit.
Does it make sense or am I an idiot?
Don't be afraid to call me an idiot if that's the case. I'm a person who likes to know where I stand.
Thanks for your candor.
tdeel