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First, a small terminology correction. You don't buy a naked call. That's an outdated form of description from decades ago. A naked call is a short call that is not covered by long stock or a long call. Your broker allows such trades because the margin requirement (the risk) is the difference in strikes less the premium received. My broker ...


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The best thing to do depends on what the stock actually does going forward. If NCLH is above $16 at tomorrow's close, you will be assigned and your shares will be sold at $16. If you buy back your short calls, you will realize a loss on them but since NCLH is higher, you have a net gain due to the appreciation of the stock. I am not a fan of realizing ...


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The broker will let you make this trade, although probably not allow you to sell the 151 call after you buy the spread. The systems are smart enough to know that the 151 call is protecting you from infinite potential losses. You should never need to "exercise" this spread, or be forced to buy any stock. Just close out the spread on expiration day or sooner. ...


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If this is a $215/$217.5 vertical spread for a credit of $251 then you have indeed found a risk free position and you will make $1, assuming that you do not pay commissions or assignment/exercise fees. The downside to this trade is if MCD expires between the strikes. If you do nothing at expiration, you will be put the stock at $217.50 (buy it) and your $...


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During any given trading day, options owners submit their exercise notices (in this case, Friday). In the evening, the OCC uses a "Wheel" to randomly determine who will be assigned and notifications are then sent to the brokers. These are received by traders early in the morning of the next trading day (you received your notice Monday AM that you went ...


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Per CBOE stats, only about 7% of options are exercised. There are several reasons why an option might be exercised early: The owner doesn't know any better and throws away remaining time premium, not realizing that he'd salvage that time premium by selling the option. This is rare. The time premium is low and exit costs (commissions and B/A spread) are ...


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