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

Question by fakechat6: Can being assigned while doing a call vertical option spread make you more money than just a regular spread.?
Generally speaking I hear on the boards a fear of being assigned when you play options. When I analyzed my vertical spread I came to the conclusion it might be a good thing but wasn’t sure if my math was so I am asking for a check on it.

Lets say your assigned a 2 days early because the spread on the bid ask was a little out of whack and it was better for the owner to exercise the option inseat of selling it back. I have a call vertical spread where I went long the 45 and sold short the 48. The Short call was assigned to me and I am now -100 short stock at 48 basis and still have my 45 call. (for simplicity ill ignore the debit I paid to do the trade). Assume the underlying stock is at 50. I figure if I end the trade now I lost $ 200 on the 48/50 -100 short and made $ 500 on the 45 call for profit of $ 300. Thats the max I could have made on the trade if I had sold the vertical. If the underlying stock goes up or down the next 2 days I beleive I keep my $ 300 gain because the long and short -100 just move together. However if the underlying stock drops down I also am garunteed at least $ 300 but I think i could even get more.

when I drop below the 45 call strike price the -100 short is not offset anymore buy losing money in the long call. Say the underlying drops down to 40 because a oil rig blew up or something. When I sell my long call I would get nothing because it is below 45 but my -100 short is now worth $ 800 because my basis in the short -100 is 48. So Basically a vertical call spread with a max profit of $ 300 can be worth much more because of assignment. I realize you have to pay interest and margin issues but is the basic math correct that I presented here, being assigned can be a good thing?

Best answer:

Answer by Money
Can you make your questions simple?

Give your answer to this question below!

Is investing into hedge funds a way to trade options rather than doing it by yourself?

Question by William M: Is investing into hedge funds a way to trade options rather than doing it by yourself?
I want to know if investing money into hedge funds is a way you can trade options without doing all the work yourself and leaving it to a proffessional such as a fund manager to make you the money?

Also, can investing into hedge funds make you wealthy?

Best answer:

Answer by Radar Man
Hedge funds don’t just trade options. They use it with stocks and bonds. Generally hedges funds are more risky than stocks and yearly returns can be very high ( and low).
Typically, hedge funds are not open everybody. Only the wealthy are allowed to invest. Net worth over $ 500 million and investment over $ 50K.

Know better? Leave your own answer in the comments!

Where can I learn to trade options effectively? Is there good book by someone who is successful at doing it?

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Is anyone out there making money trading options derivatives? Is it possible to earn a living doing this?

Please only answere if you have actual experiance trading options and derivatives.
What’s a good place for me to start learning how to trade?
Can you recomend a specific web site that for option and derivative trading?
I know there is significant amoung of risk involved but the reward is great as well.

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what is the biggest\best company doing online future options trading?g?

what is the biggest\best company doing online future options trading?

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