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AEM Vertical Put Assignment Question
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Created: by angusyoung Attachments:0

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AEM Vertical Put Assignment Question

  #1 (permalink)
Saint Louis, MO
Posts: 6 since Jul 2015
Thanks: 1 given, 0 received

AEM Vertical Put Assignment Question

I have a think-or-swim account.

I had a vertical put spread with a 27 strike AEM put sold and a 26 strike AEM put purchased. 11 contracts sold and 11 purchased. Both expired yesterday ITM. I was assigned on the 27 strike AEM. So I now have 1,100 shares of AEM. But the 26 strike AEM is not listed in my account as exercised, so I am in a margin call.

I haven't been able to get in touch with think-or-swim, the folks at TD Ameritrade weren't helpful, they just recommended calling on Monday, which I will do.

I went into the expiration day with the understanding that "Remember, on expiration, think-or-swim will automatically exercise any equity option that is $0.01 or more in-the-money." AEM closed at 25.16 on Friday, so my 26 strike AEM put was $.84 in the money, so I expected it to be automatically exercised per the policy above.

So I expected to be assigned, but I also thought that my 26 put would be auto-exercised, and the shares would net out, and I would lose $1,100 dollars minus the net credit when I opened the spread.

I did not expect to be long 1100 shares of AEM with an unexercised expired 26 put. Is it normal that my position is not up to date today, but will reflect the correct position on Monday? Did I make a mistake by not manually exercising my long option on Friday and just learn an expensive lesson?

Worst case I would sell the 1,100 shares on Monday at market price, but that would be around an $.84 per share loss that I didn't need (depending on how AEM opens), plus a wasted premium on a purchased option I didn't use.

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  #2 (permalink)
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  #3 (permalink)
Saint Louis, MO
Posts: 6 since Jul 2015
Thanks: 1 given, 0 received

So my account was updated as I expected later on Saturday. It was a bit unnerving to be in a margin call and think that my option didn't auto-exercise, but it all worked as I expected it to.

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