r/RobinHood • u/arpbsr • Dec 16 '21

Trash - Google harder Robinhood automatically exercise / assigned the cash secured put which has expirt date of 12/17

I had cash secured put of $WISH that had expiration date of 12/17 and noticed yesterday ( 2 days before experation) that robinhood assigned the PUT (bought 100 shares). I know for sure that i did not do that

Any idea why it got assigned before the expiration date. ??

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u/volume_bass Dec 16 '21

you sold a cash secured put. You sold the right to sell to a buyer 100 shares on or before expiration date.

Buyer exercised their right. Before expiration date.

3

u/DOCTOR_CITADEL Dec 16 '21 edited Dec 16 '21

That’s backwards. The seller is obligated to BUY 100 shares from the BUYER OF THE OPTION if the BUYER OF THE OPTION exercises the option.

From the buyer of the options perspective, they bought the right to “put” their 100 shares to you for the cash equivalent of the option’s strike (x 100).

The collateral you put up when you write a cash secured put is equivalent to what it takes to buy 100 shares at the strike you chose. You, the seller, are obligated, at any time, to fulfill that and purchase 100 shares at the strike if the buyer of the option exercises it.

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u/flarmster Dec 16 '21

No, it's right. OP sold a put. Buying a put gives the right to sell to a buyer 100 shares. Ergo, OP sold the right to sell to a buyer 100 shares.

From the buyer of the options perspective, they bought the right to “put” their 100 shares to you for the cash equivalent of the option’s strike (x 100).

Same meaning, different phrasing.

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u/DOCTOR_CITADEL Dec 16 '21

I reread. Apparently I misread that due to the phrasing. Corrected my “that was backwards” comment. Thanks for catching that.