HBC: Got assigned on my BRCS

For the first time ever today I was assigned on all of my short Mar 22.50 HBC calls.  I was a bit surprised to see the email from TOS about it and immediately checked out my account.  Sure enough I was short a bunch of HBC stock.  I’ve heard that short calls are more likely to get assigned than puts and with the huge pop in the market yesterday I guess someone really wanted that stock.

So now what do I do?  The short answer is – nothing.  The position has the exact same risk profile as the BRCS.  The only difference is my margin takes a bigger hit because I am actually short the stock.  However, I still have the long Mar $25 calls which means until they expire next week my max loss is still the original $3.57.  However, my max gain is much larger now since the stock can become worth  a lot less than the original short option.

So even though my margin is reduced more than I want, there is only about 9 days left to expiry and HBC got knocked down 6% today even with the financials showing more strength.   So if it gets beat down more I stand to make so nice coin off this trade.