3 Responses to Trade – Sell XXJEW

  1. txraddoc says:

    Hey Rich,

    New to the site. Nice stuff!! After a couple years of playing (and mostly losing) with options strategies, I find myself now gravitating to the ETF covered call strategy. Seems like there is very little downside to this strategy if one is willing to hold the ETFs for the long term.

    I ran into an interesting situation on Friday. I thought you might have some experience and insight. I too owned shares of XHB with April calls written against them. XHB closed just below $23 on Friday but I was assigned on my April 23 calls. I assumed that I’d keep the shares but didn’t.

    I wonder why an option buyer would exercise his option when the shares could be had in the market less expensively.

    Thanks for the great site!


  2. RichSlick says:

    That sounds a bit fishy, who is the broker that assigned you?

    When you sell options the buyer can exercise whenever they want; it is rare but it does happen.

    My best guess is that an inexperienced trader made a mistake and took the shares and you happen to be assigned.

    The trader might have bought the shares to sell calls against in May to mitigate any losses as well.

  3. txraddoc says:

    Interactive brokers. Oh well, no big deal. A nice little profit in a few days and then I bought the shares back on Monday for less than $23.

    Happy trading!!


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