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Sell my stocks while being assigned - need answer quick

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  • Jul 21st, 2020 7:17 am
[OP]
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May 6, 2010
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Markham

Sell my stocks while being assigned - need answer quick

My call was in the money Friday so it will be assigned. But I still can sell the assigned stocks. What happened if I sold my stocks while the whole assignment is in transit?

Would the bank take cash equivalent of the strike price of my call?
or
Would it take my cash, repurchase the shares?

Even worse, would I get into any trouble for this?

TIA.
7 replies
Deal Addict
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Jan 28, 2012
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If you don't have margin, if you try to sell it should stop you because the shares are tied up with the covered call.

If you have margin and don't have the shares to sell, then the broker will short sell 100 shares for you. You then have to go buy 100 shares at market to cover your short.
[OP]
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May 6, 2010
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Markham
That's the thing. It's a RRSP account so no margin allowed. It stop me from selling another covered call but not selling the actual stocks.
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dec12 wrote: That's the thing. It's a RRSP account so no margin allowed. It stop me from selling another covered call but not selling the actual stocks.
Are you sure? Did you actually go ahead and sell them or are you just asking what would happen?

It might look like you can sell them but what should happen is the order should get rejected if you actually place it.
Deal Fanatic
Jun 27, 2007
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Rhaegar wrote: It might look like you can sell them but what should happen is the order should get rejected if you actually place it.
this is expected behavior, anything else is a bug
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[OP]
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May 6, 2010
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Markham
The order was not rejected. It wasn't executed because the bottom fell out.

A covered call order was rejected.
A regular sell order was not rejected.
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May 2, 2019
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Vancouver
Since this is RRSP, your broker has a right to play it safe and not allow using unsettled cash/stock at all. CIBC Investor's Edge had a recent change when one cannot even buy stocks with recent (unsettled) proceeds from another sale, except margin accounts. Don't take your chances. You shouldn't try this unless you clarified your broker allows it; their system checks may or may not match the official rules.
[OP]
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May 6, 2010
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Markham
Thanks for all the replies.

The Friday assignment finally cleared from my account this morning. It seems that the shares were sold and assigned on Friday! Basically, I had 100 ghost shares on my account.

My sell order was not rejected but didn't execute because it didn't hit the price limit. Had it went through, I would've have shorted a stock in an RRSP account!

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