My First Assignment

Everything in this world has its first. I had my first assignment today. Typically, when an assignment happens, you tend to suffer a losing position. I made a loss of $173 after closing out my positions (post assignment).

It was a credit put spread in AAOI (relatively micro cap stock) of which I had a bullish directional assumption on this stock. As shown below, I was trying to roll my positions as many as times as possible to give myself more time to be right. Nevertheless, the stock was well under water and the assignment happened today.

When I sold a credit put spread back in Feb 2021, I was relatively bullish on the underlying….

Assignments are part of life. It will happen, will always happen in the near future. Stay calm and restore your BP by closing out the positions. It is very important to trade options with liquid underlying – (i) easier to do rolling / adjustments and (ii) when closing out the positions, you may not need to suffer any illiquidity premium.

Disclaimer: This is not an investment or trading advice / endorsement. Please refer to general disclaimer of this blog. If in doubt – please consult with your licensed financial planner or adviser.

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