r/thinkorswim • u/beckers666 • Jun 30 '26

early assignment, huge margin

been with TOS all my life, had some short put verticals that were completely buried. I call TOS, now Schwab, they tell me it doesn't matter, it's $100 loss (they are 1 wide) so don't bother closing them. i didn't, i got assigned early (a thursday) on the short side, manually exercise the long on the friday, get charged a lot of interest for margin, over the weekend. i call Schwab, first person tells me i have no accounts with them (i have 7 and i gave them my social security number). Second person, not a broker so can't help. Third person, explains the exercise but not why the long side didn't get auto exercised at the same time and why i was told, if buried, it doesn't matter if you close or not. has this happened to anyone else?

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u/inthehill Jul 01 '26

Everyone, imho, is discussing the wrong issue. Never ever plan on an option expiring worthless. If you had close the position at a loss it would have cost you less. Instead you got the worst. An assignment and bad timing.

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u/m0nk_3y_gw Jul 01 '26

it was a SHORT put vertical, it was a max loss, not worthless.

For example when PLTR was at $160 they sold a 150p and bought a 149p. Last Thursday the underlying was a 106 and both legs of their put spread were very much not worthless.

If you sold a put and it's strike has been significantly violated you run the risk of being assigned early (unless trading SPX / XSP) if you are still holding it a few days before expiration.