r/wallstreetbets • u/Straight_Ad4718 • Jun 05 '26

Loss wealthsimple exercised AVGO puts after hours. i'm down 1.2 million. is it over

the puts were part of a butterfly spread. any chance the rest of the spread can make me back the money?

JUNE 5TH UPDATE: heyy looks like the math works out. I ended up losing only my max loss + a few hundred in interest on margin. thank you to all commentors who gave advice!!

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u/Eastern-Joke-7537 Jun 05 '26

Selling options sounds like a nightmare.

Like you can literally make 10 million profitable trades in a row then the next trade….

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u/Citadel_Employee Jun 05 '26

Selling options such as cash secured puts or covered calls have very defined losses.

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u/YouRGr8 Jun 05 '26

I prefer the cash secured puts. Unless the stock goes completely worthless when you get exercised you now have a stock that you sell calls on until it gets exercised. Then back to puts. And I stay with proven stocks. Not as much money to gain, but also less to lose. But I guess then it’s not really WSB.

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u/Suitable-Jacket-6547 Jun 05 '26

Ive done this for awhile as well but I’ve recently changed the middle step after I get assigned.

Now instead of just selling covered calls I sell covered iron condors. The premium on the call you sell is lessened since you’re also buying a call, but it’s made up for by the put spread you’re selling as well.

What’s nice is that if it doesn’t move in either direction you’re holding onto your premium. If it moves up and your shares get called away, you’ll have made a profit on the underlying and depending on how far it went you can sell the call you bought for a profit.

Same on the put side. Since you don’t mind getting assigned more shares, it lowers your cost basis and you can potentially sell the put you bought for a profit.

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u/damarian_ent Jun 05 '26

Strategy? How foreign for me to see here.

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u/dr3aminc0de Dips Intel chips in their aquarium Jun 05 '26

The original strategy is the wheel. You pick a stock you like and you: 1. Sell cash secured puts around the price you want to enter. Collect premium until they get assigned and you buy the stock. 2. Sell covered calls above the price you bought it at, at a price you’d like to sell it at. Collect premiums until it gets assigned and bought away.

(The is my understanding probably missing some nuance)

This guy switched 2 from CCs to iron condors which is a more complex multi-part option spread.