This is at close today… Why the put options had any value bid-ask??? Because after $NVDA’s result the option owner is going to decide whether to assign those shares or not…
Here is yet another example of how the option assignment works… This person got Assigned on their $HOOD calls, while they thought the calls expired worthless on Friday, …
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- Sometimes options are exercised irrationally in a non-economic fashion. That was NOT the case for HOOD last week.
- HOOD was trading at 108.93 at 17:30 on Friday. That’s way over $105 and $106, so of course those options would be exercised. Even if the buyer of those options didn’t explicitly tell their broker to exercise, most brokers will do it automatically for them (most good brokers state that they will automatically exercise any option that is at least $0.01 in the money).
For volatile stocks like HOOD, I would put a bid of $0.05 (or maybe even higher) near the expiration date if I want to be sure to not see an assignment over the weekend.
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Its not bad to get these calls assigned. When you buy them, you are aware of the fact that you will get them depending on your strike date and price.
That’s not the point… many assume, market close determines option expiry, is the point. Many folks still trying to save the $0.05 or $0.1 or $.2… whatever by waiting for expiry. You should have a target price at which you should close. Typically I aim for 60% to 75% return on puts and close them. Same goes for calls… if you have profits you need to lock it… not wait for the last cent…
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Makes sense generally.
However, I always go into the trade with the mind set of waiting till expiry or taking assignment. Example: I bought a ton of CROX leaps yesterday at $80 strike for Jan 2027. I don’t care what the market does in the mean time.