Hi all,
Wondering if you could help me with some advice.
Noob Here
I'm not really sure what happened on one of my recent transactions.
On Mar 18, I opened a bull put credit spread on CCL expiring Mar 27: Sold 24P, bought 23P protection (net credit received = 27). Expected max profit if CCL stayed >24 at exp.
CCL closed ~24.11 (above short strike). Both puts should have expired worthless; I keep full credit. Right?
But Tastytrade activity shows:
– Mar 28 "Bought" [short leg?] @ $0.22
– Mar 20 "Removal" @ $0.00 (long leg)
Why the $0.22 "buy"?
https://i.redd.it/obqiccox9fsg1.jpeg
Posted by Mysterious-Duck7961
2 Comments
Looks like you might have been assigned on that short leg if CCL touched or went below 24 at any point near expiration, or Tastytrade’s auto-close logic kicked in to prevent pin risk. Usually, if it’s that close to the strike, brokers will close it for you to avoid a massive margin headache. Always worth checking the ‘Activity’ tab for the specific assignment notification.
I think the risk management team just sold out your spread right before market close to avoid pin risk (short leg assignment with long leg expired). This happens often when the broker is concern that the account don’t have enough cash to support short leg assignment or the account is lower option level. Next time close out the spread by yourself and don’t go for max profit.