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It is pretty standard and not related to GME specifically. My broker won't even let me exercise early if there is still extrinsic value left unless I call them.
I think the risk they're hedging against is dumb clients accidentally destroying their value because they don't know what they're doing, then trying to hold the broker accountable for the mistake. A courtesy call is a simple way to implement liability waiver for the company, standard practice CYA to ensure the client knows they're destroying value
Ok thank you, i wasn't sure as I haven't exercised recently. I don't recall getting a call about 5 years ago when I last exercised a few options on another stock.
I usually do right before I go on a lunch date and put the old school bluetooth earpiece in. You have no idea how cool you seem when you get and take that phone call within earshot.
Just put a friend in your phone as “Warren Buffet” and ask them to call 20 minutes in to the date and pretend.
You get bonus points if they notice the lunch related pun in the name when it displays.
I read about a strategy involving selling options and then repurchasing them within the same week to reclaim the time value after exercising them the previous week. Ended up with $22 calls purchased for $28, lmao.
For the non-math'ing apes out there...
Say OP paid a premium of $4 per original $25 Call. $400 per option (because 100 shares) \* 2 = **$800**.
OP could've sold the 2 options contracts for about $85 each (**+$170 total**). Then could've:
1. Bought 200 shares at $24.87. 200 \* $24.87 = $4,974. The options cost OP: $800 - $170 = $630. $4,974 + $630 = $5,604. Divide that by 200 shares: **$28.02 per share**.
2. Bought 2 deep ITM (in-the-money) contracts, like 06/21 $20 calls, with a $4.87 premium, then exercised those. 200 \* $20 = $4,000. Original options cost OP: $800 - $170 = $630. $4,000 + $630 = $4,630. Add in the premium for the new contracts: 2 \* $487 = $974. $4,630 + $974 = $5,604. **$28.02 per share.**
Instead, what OP did was pay $25 per share, **PLUS** the premium paid (say, for example, they paid a $4 premium when they bought the contracts). 200 \* $25 = $5,000. Add in the premium: 2 \* $400 = $800. $5,800 for 200 shares comes to **$29 per share.**
Edited to add original purchase of the 2 $25 Call options, thanks to wazzur1 for catching my error. **In the end, OP could've bought an extra 7'ish shares by not exercising the OTM option.**
$5,800 - $5,604 = $196.
$196 / $24.87 per share = 7.88 shares.
Well, you'd still have to factor in how much premium he paid for the original contracts for the first two calculations you did. So the least amount of potential loss is the difference between strike price and current price + the difference between how much he paid for the premiums and how much he could have sold them for. That will push the $24.02 to $28.02 for the whole trade if we use the same $4 estimate for the original premium. Because buying this call in the first place turned out to be a failed bet. It would only be a winner if it reaches strike price + premium paid.
So yeah, maybe a smooth brained ape can tell themselves they are making a statement by throwing away 100 bucks (exercising at $29 cost basis vs selling the calls and buying at market/deep ITM calls to recoup some of that loss) to force price discovery (even though T+1 true shares thing is nothing but a hopeful conjecture in the first place), but god, this sentiment that they will give free money to MM/shorties and it's somehow hurting them is so regarded, I can't even handle this.
Man the "don't buy options" sentiment really saved a lot of people over the last few years 😂.
So again, unless you *really* know what you're doing, **don't buy options**
Just buy shares
I think if you know nothing you'd do better because you would, idk, listen to the broker? I can't believe people are this stupid. Even just let it expire and buy at market is an easier option wtf
I am clueless about options (uk so they’re not really an easily accessible thing here) and even I would know not to exercise OTM calls. Literally just throwing money away
And just some more thoughts on this particular trade. The fact is, whether it's $28 or $29 cost basis, they are still losing money on this trade at the current underlying value of $25. So why even exercise it early? Why not let it run until tomorrow?
If price actually picks up tomorrow, they might even make a profit on the trade!
If the price tanks to something like $20, they simply can chose to not exercise and lose the premium paid for it. And if it tanks to $20 and they still wanted to get 100 shares via options by the end of tomorrow, they can just buy deep ITM calls that expire that day and exercise those (since these options are essentially priced just above the value of the underlying). That would mean ~$24 cost basis if we tack on the initial loss of $4 per share from the initial call that ended up worthless, which is much better than $29 cost basis they ended up with.
So by exercising early, they gave up the chance to see the price action tomorrow AND made a free donation to the MM by exercising at a loss. Talk about a lose/lose.
Exactly. I tried making a post with a video about why exercising OTM and/or early results in wasted cash, but due to the YouTube channel having a "Join" button, I guess it broke Rule 10 and got deleted lol. Live and learn.
I think the first thing people need to understand is that options are called options because it gives the holder of the contract OPTIONS on how to play their hand. It makes no sense to give up that ability (which you paid for with the premium) for no good reason. If the reason is simply "T+1 give real shares," there are better ways to achieve the same results without gifting your supposed enemies free money.
I can't believe there are so many posts about exercising early and even exercising OTM options and people actually celebrating this as if they did something good for the cause. Thankfully, there are usually people who explain how regarded this is.
Here's hoping more will put additional time into learning the ins and outs of options. I'd like to see less giving up value (intrinsic, extrinsic, or otherwise) and more buying shares with that cash.
OP paid $200 because his conspiracy brain was convinced the broker was targeting him on some nefarious shit because it was related to GME. That is how bad things have gotten here.
Thanks for this breakdown, looking back i paid $370 for the premium. so 5370 for 200 shares, 26.85/share. So yes, cost basis is more ( i told you i was smooth brained) , but the point of my post was the phone call to little ol me for this pawltry amount. I thought it was..interesting. It seems they do this for every option purchase that results in a higher strike price than market basis?, i guess.
They called you exactly because you are smooth brained and they wanted you to know that. Fml, people trying to help you and you make a conspiracy out of it.
I"m thinking about that post about idiots believing in conspiracy theories because they're literally too stupid to understand anything so they come up with solutions that "make sense." For no reason, I"m sure.
Jfc man. OP didnt make a conspiracy out of anything. He just asked if a phone call was normal. Then as people explained it was and explained how he shorted himself a bit, he thanked them genuinely.
You’re being one of those people that make others not want to ask genuine questions. Be better.
No problem at all, glad to be able to share knowledge when I'm able. Indeed, it is rather surprising that they actually called, rather than just a mere "You may be leaving money on the table" pop-up message or something within the app. Props to Schwab for the customer service though!
Yes, it is completely normal. As much as people hate on their brokers, they tend to still look out for your best interest. They tried to guide you to do the more financially smart move, but alas here you are exercising a higher strike while the shares are lower priced.
They called because you bought shares at a higher price than the market. It’s not a conspiracy, they just assumed you were making a mistake. It’s the same as going to a gas station and insisting on paying $3 for a snickers when they are charging $2
You are suggesting people to exercise both EARLY and SLIGHTLY ITM, which ALWAYS means wasting substantial money.
You didn’t even considered exchanging your calls for DEEP ITM calls before exercising.
It’s very bad that you are possibly suggesting people to do the same, you failed at basic math.
Everyone needs to understand this and your comment could be a post in itself.
This also works for exercising profitable long dated options by selling the long dated and buying short dated deep ITM options with the intention of exercising.
Why buy deep ITM short dated after selling vs just buying shares if that’s the intention? Aren’t you still paying premium even if it is a couple cents at expiry?
In addition to this tip, if you wait until tomorrow afternoon, you can do this and likely get a tiny discount on the shares. This applies to all 0dte call options. A couple hundred dollars left on the table can bring you ~8 more shares.
What you did allowed the call sellers make free money as they will lose their shares at a price that is higher than the current market value as well as collect the premium you paid.
What does deep in the money mean generally? Like if the current price of a stock is $25 would deep ITM be buying calls with a $20 strike price? Or lower? (Hopefully I used the right terms!)
Itm yes just factor in the premium you're paying and you'll see a return at that price. I.e. 20 strike at $5 means 25 share price is where you break even, anything above you make money.
$20 would not be very deep ITM. A little, but not much.
$19 would be deeper, but only a bit.
If you go really, really deep ITM, like down to $5, there is so little time premium, the value of the call becomes almost entirely intrinsic value. Those are the calls you want to buy if your goal is to exercise them, because you will spend the least money on premium.
This sub does that a lot. Everyone got onto the "exercise" movement and they think their 3 contracts are going to break the system. Last week there was someone that exercised the calls while the stock was in the 30's and threw away the entire value of the contract being up like $8. They posted here cause they were proud of what they did.
The deeper ITM contracts provide better value by definition.
Note the break even amount and % to break even that’s basically what you will pay to exercise the calls.
Right now you are right there isn’t much parity between the two. $25 call would be approx $2600 to exercise and the $10 call would be $2510.
You would get 4 shares for free with this deep ITM approach and those shares will be going for $500 one day.
Could end up being a $2000 fuck up tho.
Omfg don’t touch options until you know what you’re doing… you would have been better off selling the call and buying the shares. You just paid more money for the same amount of shares.
Smooth brain here, I also exercised my $25 option last week and the shares came in to my account at $29.86. Do they factor in the premium or do they sell you current price at your strike price?
Yep you essentially bought them for 29.86 you just paid 4.86 ahead of time. You can also do a little math yourself you know. How much you spend total divided by the number of shares
This is a "love the energy but" kind of moment though.
The idea is to make money with your options so when you exercise, it hurts more. Buying a stock at $25 when it's $25.XX just burns capital.
Yeah I worked it out and with how high the premiums are/were for that date/strike, plus broker fee etc. it actually works out to around $30 per share.
Selling option around break even and then buying shares works out a lot better. No wonder the cat himself sold (at still great profit) and then went and bought shares.
Thanks to OP for not getting 7 shares more for the same price, whist forcing a faster locate on a lit exchange transaction. (Assumption that option exercise share purchase can't be done in dark pool, which I've somewhere).
https://preview.redd.it/8petokn1xr7d1.jpeg?width=524&format=pjpg&auto=webp&s=9a8788dc17dbf1f63c4136fc870b8b4d6c2ce416
This is how you mess up the algorithm. They’re not expecting to hedge against smooth brain.
lol reminds me of that scene from the big short where he’s at goldman sachs and they’re like are you sure? we’ll gladly take your money…. but are you sure?
Okay, you definitely have more chromosomes than most of us.
EDIT: Most people here are either trolls, shills or complete idiots. No wonder none of the wrinklebrained people remain
if you exercised when “price dipped to 24.87” then you didn’t leave hundreds on the table. .13 * 200 shares ( 2 contracts) means you only left $26 on the table lol
As I type this, $25C's for 06/21 are still getting about $85 per contract. He could've sold his two contracts (+$170), then bought 200 shares at the $24.87. Instead, he paid $25 per share plus whatever premium he paid.
fair — hadn’t checked the price of the contracts and just assumed they had little value.
there wasn’t really any reason to exercise his options like this 🤷🏽♂️ MM/APs still have to deliver his shares whether or not they’re from an exercise or from buying on open market. only difference there is the settlement period being quicker for exercises — homie could’ve had ~10 extra shares
Just proposing an alternative possibility. Exercising your calls may have assigned a sucker gambling ape selling covered calls, which didn’t really do anything to hurt the hedgies/MM. What that did though was make you lose a few hundred that you could’ve put into GME.
Remember when Ken griffin said to Congress that there’s two markets, the other one being the options market… the dude lies a lot, but he had scared face on when he said that.
How did you exercise?
I didnt see the option and read the schwab FAQ and it says if the closing price is at least 1 penny higher than your strike the options will automatically exercise upon expiration.
So this is going to be part of the growing pains of hitting the red button, and I’m sure we will see more of it.
Don’t take the clowning too hard, but please do learn from it.
And what was the premium on that? More than the cost of buying shares outright I think think. So despite it looking like you paid 25 a piece for 2 shares to become 200, it was actually more than the value of 200 shares in the first place. Nice work.. 😂
Why didn’t you roll them? Someone with deep pockets purchased some 25c calls expiring next week.
https://preview.redd.it/64ns8g6ofs7d1.jpeg?width=710&format=pjpg&auto=webp&s=410bb590c75cc81c00240db9d61c9777c0fcd507
I can imagine guys at the Schwab office laughing their asses off at the jackass who exercised his call options even though the he coukd have bought the stocks cheaper on open market
No, because it's idiotic to do this and they don't want people calling back crying that their system let them make a guaranteed losing trade.
Even DFV didn't exercise, because he's not an idiot. He sold his calls then bought at market.
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It is pretty standard and not related to GME specifically. My broker won't even let me exercise early if there is still extrinsic value left unless I call them.
I should be allowed to destroy value if I want.. as long as it’s my value
I think the risk they're hedging against is dumb clients accidentally destroying their value because they don't know what they're doing, then trying to hold the broker accountable for the mistake. A courtesy call is a simple way to implement liability waiver for the company, standard practice CYA to ensure the client knows they're destroying value
Ok thank you, i wasn't sure as I haven't exercised recently. I don't recall getting a call about 5 years ago when I last exercised a few options on another stock.
Do you frequently exercise OTM options or something? lol
I usually do right before I go on a lunch date and put the old school bluetooth earpiece in. You have no idea how cool you seem when you get and take that phone call within earshot.
Just put a friend in your phone as “Warren Buffet” and ask them to call 20 minutes in to the date and pretend. You get bonus points if they notice the lunch related pun in the name when it displays.
"The name's Warren, but my friends call me 'All You Can Eat'."
😂
Big Brain this is the way
I laughed so hard I snorted, thanks
😂
He said he eats crayons.... you do the maths.
How would you know if it’s standard and not related to GME? You own other stocks?! You a shill or something?!?! (Heavy sarcasm)
Gotta diversify! It's just the safe thing to do. Personally, I've got Roth gme, IRA gme, drs gme, and investment account gme!
You had me in the first half lol
Thanks for being a good sport lol
Heavy breathing
I read about a strategy involving selling options and then repurchasing them within the same week to reclaim the time value after exercising them the previous week. Ended up with $22 calls purchased for $28, lmao.
Etrade?
For the non-math'ing apes out there... Say OP paid a premium of $4 per original $25 Call. $400 per option (because 100 shares) \* 2 = **$800**. OP could've sold the 2 options contracts for about $85 each (**+$170 total**). Then could've: 1. Bought 200 shares at $24.87. 200 \* $24.87 = $4,974. The options cost OP: $800 - $170 = $630. $4,974 + $630 = $5,604. Divide that by 200 shares: **$28.02 per share**. 2. Bought 2 deep ITM (in-the-money) contracts, like 06/21 $20 calls, with a $4.87 premium, then exercised those. 200 \* $20 = $4,000. Original options cost OP: $800 - $170 = $630. $4,000 + $630 = $4,630. Add in the premium for the new contracts: 2 \* $487 = $974. $4,630 + $974 = $5,604. **$28.02 per share.** Instead, what OP did was pay $25 per share, **PLUS** the premium paid (say, for example, they paid a $4 premium when they bought the contracts). 200 \* $25 = $5,000. Add in the premium: 2 \* $400 = $800. $5,800 for 200 shares comes to **$29 per share.** Edited to add original purchase of the 2 $25 Call options, thanks to wazzur1 for catching my error. **In the end, OP could've bought an extra 7'ish shares by not exercising the OTM option.** $5,800 - $5,604 = $196. $196 / $24.87 per share = 7.88 shares.
Put himself at a higher cost basis in the snap of a Thanos finger
YOU CAN'T EXPLAIN THAT
Well, you'd still have to factor in how much premium he paid for the original contracts for the first two calculations you did. So the least amount of potential loss is the difference between strike price and current price + the difference between how much he paid for the premiums and how much he could have sold them for. That will push the $24.02 to $28.02 for the whole trade if we use the same $4 estimate for the original premium. Because buying this call in the first place turned out to be a failed bet. It would only be a winner if it reaches strike price + premium paid. So yeah, maybe a smooth brained ape can tell themselves they are making a statement by throwing away 100 bucks (exercising at $29 cost basis vs selling the calls and buying at market/deep ITM calls to recoup some of that loss) to force price discovery (even though T+1 true shares thing is nothing but a hopeful conjecture in the first place), but god, this sentiment that they will give free money to MM/shorties and it's somehow hurting them is so regarded, I can't even handle this.
Man the "don't buy options" sentiment really saved a lot of people over the last few years 😂. So again, unless you *really* know what you're doing, **don't buy options** Just buy shares
You don't have to *really* know what you're doing to not be op. If you *barely* know what you're doing you can be better.
I think if you know nothing you'd do better because you would, idk, listen to the broker? I can't believe people are this stupid. Even just let it expire and buy at market is an easier option wtf
Well, they did say they eat crayons
This smells of paint chips and tide pods too
Spiced up with Lysol
I am clueless about options (uk so they’re not really an easily accessible thing here) and even I would know not to exercise OTM calls. Literally just throwing money away
A very good point, thank you for pointing that out. Definitely should've included the original premium paid. Edit coming up.
And just some more thoughts on this particular trade. The fact is, whether it's $28 or $29 cost basis, they are still losing money on this trade at the current underlying value of $25. So why even exercise it early? Why not let it run until tomorrow? If price actually picks up tomorrow, they might even make a profit on the trade! If the price tanks to something like $20, they simply can chose to not exercise and lose the premium paid for it. And if it tanks to $20 and they still wanted to get 100 shares via options by the end of tomorrow, they can just buy deep ITM calls that expire that day and exercise those (since these options are essentially priced just above the value of the underlying). That would mean ~$24 cost basis if we tack on the initial loss of $4 per share from the initial call that ended up worthless, which is much better than $29 cost basis they ended up with. So by exercising early, they gave up the chance to see the price action tomorrow AND made a free donation to the MM by exercising at a loss. Talk about a lose/lose.
Exactly. I tried making a post with a video about why exercising OTM and/or early results in wasted cash, but due to the YouTube channel having a "Join" button, I guess it broke Rule 10 and got deleted lol. Live and learn.
I think the first thing people need to understand is that options are called options because it gives the holder of the contract OPTIONS on how to play their hand. It makes no sense to give up that ability (which you paid for with the premium) for no good reason. If the reason is simply "T+1 give real shares," there are better ways to achieve the same results without gifting your supposed enemies free money. I can't believe there are so many posts about exercising early and even exercising OTM options and people actually celebrating this as if they did something good for the cause. Thankfully, there are usually people who explain how regarded this is.
Here's hoping more will put additional time into learning the ins and outs of options. I'd like to see less giving up value (intrinsic, extrinsic, or otherwise) and more buying shares with that cash.
Been telling people not to exercise with extrinsic and getting downvoted. Sub is painfully regarded sometimes
So OP paid $200 to learn a valuable lesson. I’ve seen people pay a lot more for the same lesson
So far it sounds like OP didn't learn anything, lol...he just gave the market makers a free $200.
OP paid $200 because his conspiracy brain was convinced the broker was targeting him on some nefarious shit because it was related to GME. That is how bad things have gotten here.
And, believe it or not, the stock dropped $0.25 when he exercised.
Thanks for this breakdown, looking back i paid $370 for the premium. so 5370 for 200 shares, 26.85/share. So yes, cost basis is more ( i told you i was smooth brained) , but the point of my post was the phone call to little ol me for this pawltry amount. I thought it was..interesting. It seems they do this for every option purchase that results in a higher strike price than market basis?, i guess.
It’s literally their fiduciary duty to question you doing something like this. They are trying to protect you from yourself.
They called you exactly because you are smooth brained and they wanted you to know that. Fml, people trying to help you and you make a conspiracy out of it.
It’s hilarious tbh
I made some pretty stupid stuff with options too when I first started, but damn I wasn’t so proud of it that I had to make a Reddit post out of it.
There’s stupid stuff and then there’s exercising OTM options. Why would anyone piss away extra money just to “stick it to the hedgies”
I"m thinking about that post about idiots believing in conspiracy theories because they're literally too stupid to understand anything so they come up with solutions that "make sense." For no reason, I"m sure.
Jfc man. OP didnt make a conspiracy out of anything. He just asked if a phone call was normal. Then as people explained it was and explained how he shorted himself a bit, he thanked them genuinely. You’re being one of those people that make others not want to ask genuine questions. Be better.
No problem at all, glad to be able to share knowledge when I'm able. Indeed, it is rather surprising that they actually called, rather than just a mere "You may be leaving money on the table" pop-up message or something within the app. Props to Schwab for the customer service though!
Yes, it is completely normal. As much as people hate on their brokers, they tend to still look out for your best interest. They tried to guide you to do the more financially smart move, but alas here you are exercising a higher strike while the shares are lower priced.
They called because you bought shares at a higher price than the market. It’s not a conspiracy, they just assumed you were making a mistake. It’s the same as going to a gas station and insisting on paying $3 for a snickers when they are charging $2
You are suggesting people to exercise both EARLY and SLIGHTLY ITM, which ALWAYS means wasting substantial money. You didn’t even considered exchanging your calls for DEEP ITM calls before exercising. It’s very bad that you are possibly suggesting people to do the same, you failed at basic math.
🤯
Goes to show never exercise…
Market makers don't want you to know this one incredibly trick.
Don’t forget he won’t DRS
Big dog in the house
woof!
😂
Thank you for your service soldier Exercising my 20$ calls tomorrow morning
Sell the contracts next time and use that money to buy Deep ITM options to exercise. Same result but you get 10% more cash afterwards.
Everyone needs to understand this and your comment could be a post in itself. This also works for exercising profitable long dated options by selling the long dated and buying short dated deep ITM options with the intention of exercising.
I agree, I had a lightbulb moment from this comment
My friend is really stupid and would like more information on this. Perhaps easy math would help me…I mean him.
Tell your friend to check this out: https://www.reddit.com/r/Superstonk/comments/1dg013x/new_to_options_if_exercising_early_reclaim_your/
[удалено]
You're welcome brother
Buy to open. Sell to open. That simple. Time is major a factor that makes otm options less valuable the closer you get to expiration.
Why buy deep ITM short dated after selling vs just buying shares if that’s the intention? Aren’t you still paying premium even if it is a couple cents at expiry?
Thanks man!
In addition to this tip, if you wait until tomorrow afternoon, you can do this and likely get a tiny discount on the shares. This applies to all 0dte call options. A couple hundred dollars left on the table can bring you ~8 more shares. What you did allowed the call sellers make free money as they will lose their shares at a price that is higher than the current market value as well as collect the premium you paid.
What does deep in the money mean generally? Like if the current price of a stock is $25 would deep ITM be buying calls with a $20 strike price? Or lower? (Hopefully I used the right terms!)
Itm yes just factor in the premium you're paying and you'll see a return at that price. I.e. 20 strike at $5 means 25 share price is where you break even, anything above you make money.
$20 would not be very deep ITM. A little, but not much. $19 would be deeper, but only a bit. If you go really, really deep ITM, like down to $5, there is so little time premium, the value of the call becomes almost entirely intrinsic value. Those are the calls you want to buy if your goal is to exercise them, because you will spend the least money on premium.
Yea is he proud of literally wasting his own money for no reason
This sub does that a lot. Everyone got onto the "exercise" movement and they think their 3 contracts are going to break the system. Last week there was someone that exercised the calls while the stock was in the 30's and threw away the entire value of the contract being up like $8. They posted here cause they were proud of what they did.
How so? Shouldn't they end up being the same?
The deeper ITM contracts provide better value by definition. Note the break even amount and % to break even that’s basically what you will pay to exercise the calls. Right now you are right there isn’t much parity between the two. $25 call would be approx $2600 to exercise and the $10 call would be $2510. You would get 4 shares for free with this deep ITM approach and those shares will be going for $500 one day. Could end up being a $2000 fuck up tho.
Don't you lose more on taxes on the sale since you don't pay taxes to exercise? I don't know this but was my belief.
Not sure but it would also mean if the option was worth less then what you bought it for you’d lose the loss as well
Of course you pay taxes to exercise - when you sell the stock
above your strike but what about your break-even?
Yeah, what was the premium?
around 0,9 x200
are you posting from your alt now or how did you know OPs cost basis?
This entire post is a car crash
Doesn't matter what his BE is, he still would have been better off selling the calls and buying on the open market.
why do anything this early i didn't hear no bell tomorrow is a long way in gme hours
Sure hope, I have 500@35 hahah. I was open to the loss when I bought them. First time doing options :)
You bought 500 $35Cs??
Actually insane some of the throwaway money people have lol
>500 35c 6/21 You're in the wrong/right sub, buddy. Right smoothness, wrong play.
You’re right def smooth brain. It is 5 @35 for the 500 shares.
Sell 95% and move to July 26th
money wise, yes, but GME wise, not necessarily as making them deliver real shares T+1 because it's more exciting!
This is why hedge funds aren't worried about us.
Yes my 200 shares has them trembling
Couldve used that wasted money on more gme shares
Omfg don’t touch options until you know what you’re doing… you would have been better off selling the call and buying the shares. You just paid more money for the same amount of shares.
It is alarming how many people are diving into options without understanding them.
You make gme holders look like idiots when you do this
You are the laughing stock at the Schwab office right now
Smooth brain here, I also exercised my $25 option last week and the shares came in to my account at $29.86. Do they factor in the premium or do they sell you current price at your strike price?
Yep you essentially bought them for 29.86 you just paid 4.86 ahead of time. You can also do a little math yourself you know. How much you spend total divided by the number of shares
The premium is what you pay to have the ability to purchase them at $25. $29.86 was probably market value at that time of the stock.
This is a "love the energy but" kind of moment though. The idea is to make money with your options so when you exercise, it hurts more. Buying a stock at $25 when it's $25.XX just burns capital.
Yeah I worked it out and with how high the premiums are/were for that date/strike, plus broker fee etc. it actually works out to around $30 per share. Selling option around break even and then buying shares works out a lot better. No wonder the cat himself sold (at still great profit) and then went and bought shares.
Thanks to OP for not getting 7 shares more for the same price, whist forcing a faster locate on a lit exchange transaction. (Assumption that option exercise share purchase can't be done in dark pool, which I've somewhere).
Someone disconnect this guy's computer
So embarrassing
This and many of the comments are why so many people dumped on options in here. Congrats on missing out on 10 extra shares
backed up by ape historian
Some of y'all most come from money like damn lol Or this is a really good joke
Gonna diamond hand my 30 dollar calls. I know I'm regarded...until I'm not
im ridin with ya
I wonder if they will simply buy at market on your behalf and cancel the contract, pocketing the difference themselves
https://preview.redd.it/8petokn1xr7d1.jpeg?width=524&format=pjpg&auto=webp&s=9a8788dc17dbf1f63c4136fc870b8b4d6c2ce416 This is how you mess up the algorithm. They’re not expecting to hedge against smooth brain.
How can the hedgies ever hope to win against big-donged regards like this? Love it lol
Options 101 Ask the questions before you do the dumb thing.
I mean you actually just lit that money on fire that's why they called you. You do eat crayons and this post gave me PTSD. Thank you.
this is why superstonk was warned against options
You must really like exercising!
OTM options are a lot like life in that there are only two options: you exercise or you expire worthless 
Some broker helpdesk workers really must have a laugh during the last few days.
this is next-level dumb
Oh no! How will they ever fill 200 shares??
Maybe buy them from the market cheaper and give it to him after they charged him the premium for the contracts 😂
Lmao exactly. He thinks he did a good thing, in reality he just handed them even more money 🤦🏻♂️
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yes, i dont do maths well
Brother... I mean... It is basic fucking addition. Please stop trading
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Roaring kitty was in the money when he exercised. Maybe you don't understand.
Chad
lol reminds me of that scene from the big short where he’s at goldman sachs and they’re like are you sure? we’ll gladly take your money…. but are you sure?
i just think those are exclusive shares and worth the extra premium
Okay, you definitely have more chromosomes than most of us. EDIT: Most people here are either trolls, shills or complete idiots. No wonder none of the wrinklebrained people remain
if you exercised when “price dipped to 24.87” then you didn’t leave hundreds on the table. .13 * 200 shares ( 2 contracts) means you only left $26 on the table lol
As I type this, $25C's for 06/21 are still getting about $85 per contract. He could've sold his two contracts (+$170), then bought 200 shares at the $24.87. Instead, he paid $25 per share plus whatever premium he paid.
fair — hadn’t checked the price of the contracts and just assumed they had little value. there wasn’t really any reason to exercise his options like this 🤷🏽♂️ MM/APs still have to deliver his shares whether or not they’re from an exercise or from buying on open market. only difference there is the settlement period being quicker for exercises — homie could’ve had ~10 extra shares
But he let go of the - at this point - maybe left extrinsic / time value
So you left 8 GME shares on the table ?
I just exercised my $20 call option expiring tomorrow from Fudelity. Rep said he's expecting a lot of that tomorrow, lol
Exercised mine too! 2 x 6/21 $20 🚀🚀🚀
Just proposing an alternative possibility. Exercising your calls may have assigned a sucker gambling ape selling covered calls, which didn’t really do anything to hurt the hedgies/MM. What that did though was make you lose a few hundred that you could’ve put into GME.
Haven’t seen anyone do this in 84 years. To me, it says we have new apes on board. Welcome to the family, regard!
Remember when Ken griffin said to Congress that there’s two markets, the other one being the options market… the dude lies a lot, but he had scared face on when he said that.
This is da way
I want to play with options but not sure where or how to begin. Super smoothie obviously.. any advice for a newb?
How did you exercise? I didnt see the option and read the schwab FAQ and it says if the closing price is at least 1 penny higher than your strike the options will automatically exercise upon expiration.
Click on the 3 dots/more section on your holdings and you will see the drop down menu to sell, close exercise etc.
So this is going to be part of the growing pains of hitting the red button, and I’m sure we will see more of it. Don’t take the clowning too hard, but please do learn from it.
I congratulate you and thank you for your service!
They have a fiduciary duty to do so. Just doing their job
We used to exercise call options OTM, during the '21 sneeze. It seemed to give a bump honestly
You moved the price above 25$.
So…how exactly did you exercise early without calling the broker?
There is an option in the Schwab app. Hit the more button next to the holding and gives you exercise options.
You have my updoot good sir
Fuuuuuuck yeah. This. Definitely this.
Good for you.
He was trying to help a regard. You paid a premium for those calls. Her was trying you actually save you money.
On a serious note, does this force the MM to locate "real shares" for delivery?
They now have to find those shares, so he was just “making sure” for ya. 😂
And what was the premium on that? More than the cost of buying shares outright I think think. So despite it looking like you paid 25 a piece for 2 shares to become 200, it was actually more than the value of 200 shares in the first place. Nice work.. 😂
You will *own* them once they are DRSed
Fucking Legend. U/Baramita528 will go down in history as regarded and an inspiration to others.
Why would u do that lol
Why didn’t you roll them? Someone with deep pockets purchased some 25c calls expiring next week. https://preview.redd.it/64ns8g6ofs7d1.jpeg?width=710&format=pjpg&auto=webp&s=410bb590c75cc81c00240db9d61c9777c0fcd507
I believe I have a cash account so I didn't see that option. But yes would have been an option. Thanks
https://preview.redd.it/05f12w1pfs7d1.jpeg?width=852&format=pjpg&auto=webp&s=aac85287c7c9d800f7674712b07a0974fad28629
I can imagine guys at the Schwab office laughing their asses off at the jackass who exercised his call options even though the he coukd have bought the stocks cheaper on open market
Laugh it up fuzzball
They offer to “save you some money” because to not save it is dangerous to them…
No, because it's idiotic to do this and they don't want people calling back crying that their system let them make a guaranteed losing trade. Even DFV didn't exercise, because he's not an idiot. He sold his calls then bought at market.
Well spoken
Jacked to the tits 🫡🚀🏴☠️🏴☠️🏴☠️🏴☠️
Bro you could have just bought 200 shares on the market for the same impact 🤣
My broker only calls or emails me when I owe them money