Course · Act II: Expiration Day · Act II case study
Options expiration and assignment risk
A bull call spread held through expiration: the long leg exercises, the short one expires, and Monday brings 200 shares, a Reg T margin call and a loss past the spread’s max.
Key terms
- Margin call
- A broker’s demand for cash or securities to bring an account up to its margin requirement, or it sells positions to get there.
- Regulation T
- Federal Reserve rule on broker credit: for new stock purchases, the customer generally must put up at least 50% of the cost.
“Monday Morning” is part of the full course: 6 puzzles on options expiration and assignment risk. RocketCo is fictional, and none of this is a trade. Try this act’s free chapter, “Exercise and Assignment”, first.
“Monday Morning” is in Act II: Expiration Day. 6 puzzles, unlimited retries.
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