Personal Finance & Money Asked by ck8 on March 5, 2021
I am using TD Ameritrade platform. Suppose I write a cash secured short put and the option expires in-the-money. The owner of the option then decides to exercise his right to sell.
I am okay with getting assigned since I wanted to get the stock at lower price anyway. In case the put option is OTM, I then get to keep the premium fee.
When you sell an option, you get to keep the premium no matter what when it expires. This may or may not be a profit because if assigned, your purchase (or sale) price at the strike price could be worse than the market price of the underlying.
Per this Ameritrade link, their fee for assignment or exercise is $0.00. You do not have to do anything at expiration. The OCC and you broker will handle everything automatically. The amount of the strike price will be deducted from your account and you will receive the shares.
Correct answer by Bob Baerker on March 5, 2021
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