# I got exercised but it was brokers fault



## wapanther (2 October 2008)

Hi all this is my first post and being new to trading options have bit of a problem with the broker i use.On expiry day last month i got my wife to ring broker to roll forward my position to October as i work away (miner), The broker had no clue to what she wanted and as a consequence  i was exercised.Being an inexperienced trader can someone advise me as to my rights please??.


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## brty (3 October 2008)

wapanther,

The first thing you need to do is take responsibility for the mistake, if its your trading and you were not there then it is your mistake.

Unless your wife taped the conversation and you have been able to listen to it, then you really don't know how the instructions to your broker were translated.

I would assume that as soon as you realised a mistake had been made you corrected it by trading out of the position. If not then you made another mistake.

My only 'advice' would be to let it go and make sure that what method of trading you use, you have complete control over and the necessary time to do it.

brty


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## wayneL (3 October 2008)

wapanther said:


> Hi all this is my first post and being new to trading options have bit of a problem with the broker i use.On expiry day last month i got my wife to ring broker to roll forward my position to October as i work away (miner), The broker had no clue to what she wanted and as a consequence  i was exercised.Being an inexperienced trader can someone advise me as to my rights please??.




Can you explain what position you had?


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## cuttlefish (3 October 2008)

Yeah you'll need to explain all of this a lot better for us to get the picture I think.

When you say 'you got exercised' did you have a long put or call or a short put or call.   If you had an out of the money long put or call and it got exercised as a result of the conversation that would be a tad bizzare.

If you had a written (i.e. short) put or call and it was in the money then its almost inevitable that you would have gotten exercised unless you closed out the position.

If it was a multi-part position then its a pretty big ask getting a broker to 'roll it over' - I mean you have to decide whether you're willing to pay the price the MM's will give you at the time etc. - who is going to decide that?

What instructions exactly did you leave with your wife.  If it was 'call the broker and ask him to roll the positions over' then good luck I'd say.

If it was instruct him to sell to close (or buy to close) n contracts of XYZE8 being sept $xx puts/calls and then buy to open (or sell to open) 'at market' (or split the spread or whatever) n contracts of XYZFD being the same strike price but with october expiry then that is pretty clear.

Is it a full service broker or a discount broker?  If its a discount broker and you wife doesn't really understand it then thats a pretty risky way to execute your positions.


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## wapanther (3 October 2008)

Hi Cuttlefish
 Yes I had a short put & a long put for protection(a spread) both being in the money at the time of expiry.I had instructed my wife on paper to roll forward by buying to close & then sell to open at October. Again I'm new to this but last month I rolled my position with no trouble. Yes I do understand they are my position and responsibility but hey when you also let broker no of your inexperience a bit of guidence  would help(we have to start somewhere right). To me with the limited experience I have I thought it would have been reasonably clear to the broker what we wanted???.I'm sorry if I'm coming across a an thick head. If it's my mistake then I will have to learn from it,never to old hey.
Any help would be great thanks


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## jersey10 (3 October 2008)

wapanther said:


> Hi all this is my first post and being new to trading options have bit of a problem with the broker i use.On expiry day last month i got my wife to ring broker to roll forward my position to October as i work away (miner), The broker had no clue to what she wanted and as a consequence  i was exercised.Being an inexperienced trader can someone advise me as to my rights please??.




are there no phones at the mine?


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## wapanther (3 October 2008)

I work underground and very hard to get to a phone.


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## Mofra (3 October 2008)

No offence, but with an intention to roll forward, it's generally best not to leave it until expiry day as in my experience from the Monday of expiry week there is a fairly high chance of early exercise, especially if the strike is deep in the money.


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## cuttlefish (3 October 2008)

wapanther said:


> Hi Cuttlefish
> Yes I had a short put & a long put for protection(a spread) both being in the money at the time of expiry.I had instructed my wife on paper to roll forward by buying to close & then sell to open at October. Again I'm new to this but last month I rolled my position with no trouble. Yes I do understand they are my position and responsibility but hey when you also let broker no of your inexperience a bit of guidence  would help(we have to start somewhere right). To me with the limited experience I have I thought it would have been reasonably clear to the broker what we wanted???.I'm sorry if I'm coming across a an thick head. If it's my mistake then I will have to learn from it,never to old hey.
> Any help would be great thanks




If its a full service broker you would think that a rollover of the spread with same strikes (or both strikes shifted down the same amount) would be fairly easy to ask for - not sure how you instructed your wife in relation to price - but overall its still a fairly risky way to go about the process.   I doubt you'd have too much recourse with the broker but you could always speak to them to find out their understanding of how things went.  If you have a fax machine maybe you could write the instructions down and fax them to them in future if you're not sure your wife is understanding/communicating it properly or the broker isn't listening properly.

Are you sure the assignment is as a result of the rollover instruction being misinterpreted or is it possible that you were assigned before your wife called the broker?   

As per Mofra's point - for in the money positions assignment is pretty much a certainty its just the timing.    Did your protective long put get exercised as well?  (i.e. was your loss limited to the spread? ).


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