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Tag Archives: pinning the strike
exercise of options

Why Was My Short Out-Of-The-Money Put Exercised?

When we sell covered calls or cash-secured puts, we understand that if a strike ends up in-the-money at expiration, that option will be exercised over the weekend and shares will be sold or purchased depending on the option type (for calls, our shares are sold; for puts, new shares are purchased with the cash set […]

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Early assignment of options

Early Exercise and Assignment of Options

When we sell a covered call option, we are undertaking an obligation for which we are well paid. Should the option holder decide to exercise that option, we must sell our shares at the specified strike price at or prior to the expiration date. This is the nature of American style options as opposed to […]

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Explaining "pinning the strike"

“Pinning the Strike”: A Covered Call Writing Consideration

When considering covered call exit strategies on or near expiration Friday we compare the market price of our stock to the strike price sold. If the share value is even one penny above the strike, the option will most likely be exercised and our shares sold. We may not want this to occur and we […]

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