Can being assigned while doing a call vertical option spread make you more money than just a regular spread.?

Answers:1   |   LastUpdateAt:2012-11-04 05:43:05  

Asked at 2012-08-26 14:47:18
In general I have heard on the boards of a fear of being assigned to play options. When I analyzed my vertical spread I concluded that it might be a good thing, but I was not sure if my math is what I am asking for a check on it. MedlinePlus MedlinePlus Let's say you were assigned to 2 days before because the offer ask spread was a little out of place and it was better for the owner to exercise the option to sell back Inseat. I have a call vertical spread where I went over the 45 and the 48 sold short. Short call was assigned to me and now I'm short file -100 to 48 bases and still I have my call 45. (For simplicity ignore sick debit paid to do the trade). Suppose that the underlying stock is 50. I guess if I end trade now I lost $ 200 in the short 48/50 -100 and won $ 500 in calling for profit of $ 45 300. That is the maximum that could have made the trade if it had sold the vertical. If the underlying stock goes up or down over the next two days I think I keep my profit of $ 300 because the long and short -100 only move together. However, if the underlying stock falls I'm also garunteed at least $ 300 but I think even I could get more. MedlinePlus MedlinePlus when I drop below the strike price of 45 -100 calls short and not compensated for losing money on buying long call. Di underlying drops to 40, due to an oil rig exploded or something. When I sell my calling long I would get nothing, as it is below 45, but my short -100 is now worth $ 800 because my base in the short -100 is 48. So basically a call vertical spread with a maximum benefit of $ 300 may be worth a lot more because of the assignment. I realize you have to pay the interests and concerns of margins, but is correct basic mathematics presented here, it is assigned may be a good thing?
Answer1I am gonna do it and nobody can stop me! Answered at 2012-07-29 08:53:58
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Answer2samantha kAnswered at 2012-11-04 05:42:21
Can you make your questions simple?
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