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_iy2wbin wrote

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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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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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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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CantStopWatchingVids t1_iy2yrhj wrote

Cover at open for a substantially larger gain than you expected and enjoy. First 1s free

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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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Big-Toe6215 t1_iy39bj7 wrote

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

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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

Replying to JustSayingMuch (#730,073)

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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LowExample1537 t1_iy3h5vu wrote

Elon has been tweeting regards for regards like you

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Thanos-Wept t1_iy3lqf5 wrote

Replying to eliteagentin020 (#730,920)

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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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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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

Replying to S-U_2 (#757,180)

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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