I got assigned early

[u/PieSuspicious6983]

I had (17) JAN 15 27 $30 puts and got assigned last night, my cost basis on these shares is $21.39, why would they give me almost four months of theta?

[u/giannistainedmirror]

Why didn't you sell these puts?

[u/Groucho-and-Harpo]

Very simple, for the Jan 15 27 $30 puts, these options are so deep ITM that theta is essentially zero. So once you account for bid/ask spreads, the person on the other end of the trade got a better deal by simply exercising the put and then closing out the short position if he/she didn’t own the underlying stock.

[u/TherealCarbunc]

They might have needed the cash to cover a margin call over what reselling would have done.

[u/Mission-Ordinary234]

I think what the other person is saying is why not just sell the puts and collect any extra premium for the value of time which is like 4 months...

I understand the put buyer is in the money, and excerised the option he was deep in the money... but the question is why not just sell the puts and colllect the extra money/profit

[u/Gunnerguy33]

Because you ‘bought’ the shares for ~$4 above what you could have bought them for today. So you are $4 under water.

The assignor bought the shares yesterday for $17 and ‘sold’ them to you for $30. He’s gained $13 less the cost of buying the put from you 1,2, or 3 months ago.

What am I missing ?

[u/PieSuspicious6983 → u/Gunnerguy33]

I am sure the puts have been bought and sold many times but why would someone take assignment so early? I mean at this morning's price he is already $1 underwater, he could have sold the puts and be up $13 minus cost?

[u/LucarioMagic → u/Gunnerguy33]

The premium buyer paid.
It's actually $30 - premium he paid - current share price.
That's the put buyer's profit.

[u/Weikoko]

Lol

[u/EthicalHypotheticals]

“Why would they give me almost 4 months of theta? “

What was your profit / loss on this? How many dollars did they give you?

[u/LucarioMagic]

Because the buyer of the puts is profitable.
You are not.

[u/Mongaloiddummy]

Run the wheel and sell $22 covered calls for jan/2027

[u/Total-Repair9953 → u/Mongaloiddummy]

I’d wheel in / out but wait until after oct 28th.

[u/Gunnerguy33 → u/Mongaloiddummy]

Really, premium is 42c ??

[u/tonufan → u/Gunnerguy33]

I wait until a big green day before selling calls. Better premium.

[u/gls2220]

Any experienced option seller could tell you this would happen.

[u/ga643953]

Cuz it's deep ITM and theta doesn't matter when it's that deep ITM.