Let's say I write a covered call and a buy separate put option. After a period of time, the call expires, leaving me with the underlying stock. Thereafter, the market price went down and I can exercise my put option. Will the underlying stock that I own before be use for the assignment?

  • Yes. Of course, you can always buy more stock at the current price and sell it at the put strike price if you want to keep your original stock and just want to "cash out" the long put.
    – user1731
    Nov 3, 2014 at 17:46
  • If the original stock is sold at a loss, it will create a wash sale violation if the replacement stock was bought within 30 days before or 30 days after realizing the loss. In that case, the loss will be deferred until the second position is closed. In addition, you will have to designate that you broker sell the second lot of stock and have written proof of that otherwise the IRS will default to FIFO. Sep 12, 2018 at 18:24

2 Answers 2


Yes, if the call expires worthless, leaving you with stock. Then you can exercise your put when the stock goes below put strike price.


Owning 100 shares and selling a covered call to fund the purchase of a put is called a long stock collar. If the strikes are different, it is equivalent to a vertical spread. If they are of the same series, it's a conversion.

The only way that you could exercise your long put to sell the stock AFTER the short call has expired would be if the put expired at a later date than the short call.

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