$50 TMX Group, Closing Price: $45.89. $4.11/share loss.
$28 Canadian Western Bank, Closing Price: $22.25. $5.75/share loss.
While there was an automatic paper loss upon assignment; the loss was cushioned to an extent when looking at the premium.
My choice to avoid assignment would have been to Buy to Close (buy back) the Puts I wrote. Even so, looking at the cost of buying back it would have been a greater loss than the assignment; not including the commission. Also, I would end up with no share ownership. One reason why you might want to buy it back is if you cannot afford to cover the total cost of the shares.
*Take the Ask Price because this is the first available price that someone is offering to sell back the Puts.
Historical X 50 Put information:
$50-$4.25=$45.75,
Month / Strike | Bid price | Ask price | Last price | Impl. vol. | Open int. | Vol. |
---|
15 AUG 50.000 | 3.850 | 4.250 | 4.250 | -- | 1 | 0 |
Historical CWB 28 Put information:
$28-$5.90=$22.10
Month / Strike | Bid price | Ask price | Last price | Impl. vol. | Open int. | Vol. |
---|
15 AUG 28.000 | 5.750 | 5.900 | 5.900 | -- | 30 | 0 |
Calculations:
$X TMX Group
Strike Price: $50
Premium: $0.85 (x100 shares)
Option Commission: $10.95 ($9.95, +$1/contract)
Option Assignment: $24.95
Total Cost: $5,000-$85.00-$10.95+$24.95= $49.509
Average Price: $49.509
$CWB Canadian Western Bank
Strike Price: $28
Premium: $0.45 (x300 shares)
Option Commission: $12.95 ($9.95, +$1/contract)
Option Assignment: $24.95
Total Cost: $8,400-$135.00-$12.95+$24.95= $8,277
Average Price: $27.59
Date | Symbol | Type | Expiry | Strike | Quantity | Avg Share Price | Gross | Commission | Net Return | Net Amount | Exposure | Status | Type |
2015-07-21 | X | Put | 08/21/15 | 50 | 1 | $0.8500 | $85.0000 | $10.95 | $0.7405 | $74.05 | $0.00 | Assigned | Covered |
2015-06-26 | CWB | Put | 08/21/15 | 28 | 3 | $0.4500 | $135.0000 | $12.95 | $0.4068 | $122.05 | $0.00 | Assigned | Covered |
This is what it looks like in the Questrade Account Statement:
Entry 1: Assignment of the Put(s)
Entry 2: Purchase of the underlying shares.
In the trade screen, which I did not take a screenshot of, the option is removed from your holdings the next day. With my other brokerage BMO Investorline there is a couple day delay; I assume as the trade clearing is completed.
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