You got assigned the 52 call. New comments cannot be posted and votes cannot be cast, Let's Talk About: You paid $5 each for these options, thus resulting in a total loss of $100. Explore our picks of the best brokerage accounts for beginners for November 2020. We can calculate this “breakeven price” by adding the premium paid for each option ($5) to the strike price ($50) for a breakeven price of $55 per share. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. If you don't plan on holding options until their expiration dates, this shouldn't necessarily be an issue, but it's still worth keeping in mind. If shares of Ascent Widget Company fell in value, but only to $46 per share, the put options would have resulted in a loss. Offers on The Ascent may be from our partners - it's how we make Secure Website. Most of our picks for best options brokers don't charge these fees anymore. You'll want to check with TDA. On That’s because if the stock is worth $54, the right to buy the stock for $50 is only worth $4 per option. The exception is TradeStation, which charges $14.95 for both options exercise and assignment. Say stock xyz = 54 at expiration. Do I get hit with the $20 assignment and $20 for the exercise… Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Current Plays and Ideas -- When I factor in my probabilities I calculate in the loss of possibly having the exercise fees when I calculate expected values. To cover my position I exercise my 53 long call. That means you pay the assignment fee and you're short shares of XYZ. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. Strategies -- This is one reason why stock options are much more speculative than simply buying the stock. Caters to active traders with multiple trading platforms, while also appealing to long-term investors with thousands of mutual funds and ETFs that can be traded for free. By purchasing one of these options, you have the right to purchase 100 shares of Ascent Widget Company for $50 per share at any point in time over the next 6 months. They don’t have any account maintenance, inactivity, setup, or closing fees. On the other hand, a broker like E*TRADE charges commissions, but is packed with features and resources which could be worth far more than the commission costs for many investors.

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