As you know, I had several positions that were due to expire on Thursday 16th Nov. Let's get into what happened on expiry.... One of the good things about having an open position on either side of the stock is that you know one will definitely expire worthless. In this case, it was my $43.51 Nov Puts that went to zero. So I keep the $3k and don't have to buy the stock. Nice. The calls that I had open are a little different. I had some $46.01 calls open against my existing BHP stock, and on the expiry date, the price of BHP was around $46.50. So technically, this trade went against me in the strictest sense that it wasn't worthless at expiry. Keep in mind that I wrote these calls for $1.22, so if I was assigned I'd technically be selling my stock for about 50c less than market value, but I made $1.22 on the trade anyway, minus 50c and it's still a 72c credit (remember there was a dividend too!). However... I changed my mind and didn't want to sell the underlying stock. What I did instead was place a new multi-leg order for a $1.25 credit. Yes, a credit. Get me out of this deal, and pay me a premium to do it, please. The multi-leg order had two parts: Buy to close BHP Nov $46.01
Sell to open BHP Jan $46.51 Yep, I also put the strike price up another 50c.
When you do a multi-leg, you don't specify the price of each leg, just what you are prepared to pay/accept for the whole trade. (They give you the prices afterward). As mine was a credit, I needed only to say that I'd accept $1.25. Initially, I had $1.35 but it was very close to market close and I wanted it to execute so that I didn't lose the shares, so I amended the price down. In the end, I bought back my Nov options for around $500 (I sold it for $1500 initially), and I sold new January calls for $2000, netting me another $1500. In case you're wondering why I went with January and not December for the new leg, it's because the December calls were a different contract size (112) so the parcels wouldn't match. I had to go another month out so that the 12 calls in both legs were representing an equal number of underlying stock.
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