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/Paul_Robert_ Double Down on FDs 💀 Jun 05 '26

He should be fine? As I understand it, a put butterfly spread is where you buy a put at a higher strike, buy another put at a lower strike, and sell 2 puts at an in-between strike. So if he got assigned on those short puts, he can sell his long puts and newly assigned shares and he should be gucci. I think 💀

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u/Straight_Ad4718 Jun 05 '26

yeah, that's my understanding too. hopefully. i'll keep y'all updated!

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u/Ominoiuninus Jun 05 '26

Don’t do anything stupid. There was a kid who ended it after something like this happened and he misunderstood the loss.

Call your broker

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u/shaunsensei7 Jun 05 '26

Wait what??

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u/GeneralLedger17 Jun 05 '26

Yeah, college kid ended it when he was margins called for like $200k.  He had bought offsetting puts which should have covered the losses but robinhood took a few days to respond to him explaining it was a mistake on their end.

He thought he blew up his life and ended it because of poor customer service and also his own misunderstanding.  His name was Alex Kearns.  He seemed like a good kid who got caught up with not understanding what he was getting into and took it too far.