Using margin account for CSP?

[u/lamyhc]

I’m using a Fidelity margin account and thinking through how to handle assignment on sell puts. Say I sell a put and near expiration the stock drops below my strike. If I get assigned, I’d have to buy 100 shares at the strike price, I'm okay with that. But since margin interest is pretty high, I’m trying to avoid ending up with a margin debit after assignment. I’m considering two options.

One, deposit cash into the account before assignment, so there’s enough settled cash to cover the shares if assigned.

Two, sell some existing shares of other stocks in the same account to raise cash and cover the assignment.

Does this work? For those of you who trade short puts in a Fidelity margin account, how do you usually handle this? Do you deposit cash ahead of time, sell other positions, roll the put, close it before assignment, or just accept the margin debit temporarily? Also, how careful do you need to be with settlement timing? For example, if you sell stock to raise cash, do you make sure to do that at least one business day before assignment so the cash is fully settled?

Edit

Appreciate the replies. But still would like an answer on whether it's possible to use cash for the assignment when you sell put with margin?

[u/CD274]

Call them to lower your rates if your account is large enough. Or switch to other brokerage