Options Trading Tutorial

Is there a way to get stock options you've sold to be "called away" early?

I have written a bunch of options that are now "in the money". Is there some way I can encourage my broker (Fidelity) to call the options away before the expiration date? (So that I can write more options)

Public Comments

1. If you've sold calls that are in the money, you can't really insist that the current holder (whom you can't probably identify - it's probably all in Fidelity's system) exercises them early. However this should not preclude you from writing additional options *on different shares* that you theoretically have not already promised. Think of the situation as though the owner of the call already exercises it. You effectively don't own those shares.
2. <<<Is there some way I can encourage my broker (Fidelity) to call the options away before the expiration date?>>> No. The broker cannot pick who will be assigned. Only the owner of an option can decide to exercise it. When the Options Clearing Corporation (OCC) receives the exercise notice it randomly selects which brokerage will receive the assignment notice. When a brokerage receives an assignment notice it must follow a predetermined method to select which account gets the assignment notice. FYI, call options are rarely exercised early. The only time it makes financial sense for an option holder to exercise a call option early is just before an ex-dividend date if the dividend is substantial. Put options are more likely to be exercised early, particularly if they are deep in the money. The only way you can get out of your obligation from selling an option is to close the position with a "buy to close" transaction.