This guide will show you how to manage your bots by assigning positions.
Option buyers have the right to exercise their options contracts. Exercised option contracts can be assigned to option sellers. Assignment and exercise are two sides of a single transaction.
You may be assigned shares of stock if your position goes against you. Some strategies (like put selling and option wheel strategies) rely on assignment.
The assignment does not exclude auto trading. Bots automate trading processes and decisions. Automation cannot eliminate the possibility of work (the OCC process is random).
How do you deal with the assignment of a trade in an auto trading platform? If you don’t want to keep your stock, here is a guide.
Your broker will notify you of the assignment
You can accept an assignment of stock at any point if you sell options. Once assigned, you have multiple options. Once set, you have various options. You can keep the shares (if the account has enough funds to hold 100 contracts) or exit the stock position.
You will receive an email from your broker when you are assigned stock. The notification will identify the account and position given.
Choose the position of your bot
Select the position to manage it in your bot now that you have the details.
Close your position on your brokerage account
The position may appear different depending on the broker and position type.
This was an example of a credit spread put with an 87 $ short strike and 82 $82 long strike. The short put was executed, and 100 shares of XLE were assigned to me at $87.
I didn’t want to keep the XLE shares, so I closed the long put option of $82 and sold 100 shares.
I also closed the long put in my trading platform to offset the $87 assigned short put.
Close the bot with the details
You can also enter the position details to be closed in the bot’s overridden function. This will update the record-keeping system and provide documentation.
I closed my position with a $5.00 credit, the difference in the strike prices of the two put options.
Adding the $1.15 original credit resulted in a $385 loss.
That’s it! The bot dashboard accurately displays the overridden position and capital availability results.
It is up to you and your investment goals how you manage assignments. This example illustrates how to edit the position to reflect the project’s outcome and maintain the bot’s performance and capital usage accuracy.