Update on my $Tesla puts (They accidentally got exercised):

Submitted by eliteagentin020 t3_z6s8pv in wallstreetbets

So you may or may not have seen my last post. I made a serious analysis why the tesla price will sink, conclusion: bought 0dte puts. But while very busy at work I was 5 minutes late to sell my goddamn ITM Tesla puts. Sooo waking up today (europe) I got called that my brokerage lended me 18k USD to buyback the -100 exercised Tesla Stocks. I thought about how I spent $200 for my Puts and thought I'm fu***ed. So now I'm patiently waiting for the market open to see if I have pay the brokerage big money or not. May the stocks god be with me and $Tsla will open shot,stabbed and bleeding af. Thanks for reading, eliteagentin out✌🏼

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VisualMod t1_iy2wbsl wrote

>It sounds like you're in a tough spot. I'm sorry to hear that you lost money on your Tesla puts. Hopefully the stock will open lower today and you won't have to pay anything back to your brokerage.

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RetardGoneDumb t1_iy2wj8d wrote

Cheers SPX pre market nearing 4000, you might be lucky, but in case if not, may the regardness be with you

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JustSayingMuch t1_iy39goe wrote

OP, you could not have been assigned shares if you bought puts (the right to sell shares). Did you sell a naked put (obligation to buy shares if assigned) in a downtrend for $200 premium? Sell the shares at open and move on with any profit or loss. If you wait too long, your brokerage will likely sell automatically to collect the debt, with a greater loss or profit for you. GL

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Fidug t1_iy3fc3b wrote

I am confused here as well. His brokerage could have exercised his purchased put for him if it was in the money. Generally, you are correct that to be assigned, you have to sell the option, but some brokers will auto exercise for you if you are in the money at expiration. However, he would now be short (-100) shares and would need to buy back to cover the short. However, he would have received the money from the sale, then the brokerage would not allow him to short, so they bought back the shares at 180 (hence the 18K loan). I assume this is due to settlement of funds, but something doesn't sound right.

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JustSayingMuch t1_iy3ijbh wrote

Extra steps instead of just selling the put, but OP should still receive a credit after settlement. Gains

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CharmingStyle6023 t1_iy3bxqe wrote

I was wondering why it took so many comments before someone said the obvious. Obviously he didn't just buy a put. Maybe sold one.

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eliteagentin020 OP t1_iy3em0m wrote

Nah i didn't sell anything, I bought the put but it got exercised because i didn't sell before marketclose

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Thanos-Wept t1_iy3lqf5 wrote

Exercising an ITM put just means you’re going to sell at the strike. You‘re saying you’re brokerage bought the shares per your unintentional request to exercise in order to sell them at the strike? Sounds like it will work itself out. May lose or gain a little depending on how it moves. What’s the strike?

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SateliteDicPic t1_iy3nbcu wrote

I’m sorry man but this doesn’t make sense to me. The put gives you the right to “put” 100 shares to someone not own them. How about a screenshot of the trades?

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Fibocrypto t1_iy2yp3d wrote

Options dont get exercised by accident . Just admit to yourself that you screwed up and close the position immediately ! It's an error and a bad trade and when these things happen you immediately close the position then take a deep breath and re evaluate and then move forward .

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WendysFryCook t1_iy3643b wrote

I'll pour out a Frosty in your name good sir. May the tendies flood your portfolio on this blessed dayimg

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Ok-Arm125 t1_iy2wm3j wrote

Wouldn't you want it to open up? Since you own the shares now and any down side comes out of your pocket?

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eliteagentin020 OP t1_iy2wrsv wrote

I don't even have the 18k. They lended it so I can buy the 100 shares but after that they want it immediatly back

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chuck_portis t1_iy2xftv wrote

Why don't they just make the trade themselves in that case? They're leaving it in the hands of a WSB'er who accidentally has 90X leverage?

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eliteagentin020 OP t1_iy2xy2m wrote

If I wouldnt do it myself they would do it but like 2 hours after opening and I can do it myself by opening

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Late_Television_1028 t1_iy320d8 wrote

Yeah I think this guys in trouble, he doesn’t realise assignment means he now holds the shares? Any drop in value now is going to hurt

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SateliteDicPic t1_iy3nrvl wrote

Except when you own puts exercising them decreases your stock ownership. I have exercised MANY puts in my life and never once has it resulted in me owning shares of the underlying stock.

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No-Taste8096 t1_iy3gi2q wrote

That's what I was thinking but I wasn't sure if I read his post right

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Big-Toe6215 t1_iy39bj7 wrote

Or keep the position open and buy a slight OTM call for a hedge?

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eliteagentin020 OP t1_iy3eg58 wrote

The 18k aren't mine thats the problem yk

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Big-Toe6215 t1_iy3ekv3 wrote

Right. You sold short with a liability to cover at some point in the future.

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VisualMod t1_iy2wbin wrote

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autistictheory t1_iy3qy4v wrote

what brokerage are you using that automatically exercises long options without you confirming it thats kind of fucked up

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eliteagentin020 OP t1_iy4hzku wrote

Yeah swiss brokers

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autistictheory t1_iy4i3ce wrote

ohhhhhh that makes a ton of sense now. european options

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eliteagentin020 OP t1_iy4ikxo wrote

Nope if I trade american options I can sell them early too

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autistictheory t1_iy4ylg6 wrote

ok well then i'm back to being confused but glad you were able to get out of a bad situation before it pumped early

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NOT_MartinShkreli t1_iy44a4l wrote

Hope you closed at the opening bell!

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eliteagentin020 OP t1_iy4i1u8 wrote

I did. Oooof my heart stopped for a second

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NOT_MartinShkreli t1_iy5cr5m wrote

Nice. Even made a few bucks. Can’t beat that

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S-U_2 t1_iy7831u wrote

Kinda confused about what you said.

If a put is exercised the Put Buyer will automatically buy the shares on the market (currently at a low price) and force them on the Put Writer/Seller at Strike Price (higher than market value). This happens all in the background So unlike a Call Being exercised you shouldn't have +100 (or whatever) shares because it's already forced onto the Put Writer/Seller.

They will have to pay you a higher price for the shares then what they're actually worth (so buy at Strike Price instead of Market price) and you get money in your account.

So you should be able to pay your broker immediately?

Or am I missing something....

Small example:

So

Lets say Strike Price is 100 dollars Market value is 40 dollars I buy 40$ * 100 share's = 4.000$ Put Writer must pay (done automatically) 100$ * 100 shares = 10.000$ You made 6.000$ (before fee's and/or taxes) So your debt is settled....

Right....?

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eliteagentin020 OP t1_iy7ggvv wrote

So maybe my explanation was to vague. My put option got exercised from my broker because I forgot to sell it. This means yes I was the put buyer and I had to buy the 100 shares from tesla 100x $180 = somewhat around 18k. But I didn't have 18k balance on my account so my broker lended me 18k. The problem was that if Tesla would have opened higher than my puts strike price was I would have lost big. Luckily it opened red.

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LowExample1537 t1_iy3h5vu wrote

Elon has been tweeting regards for regards like you

0