Option Block 598: PCLN and the Dangers of Assignment

Trading Block: Dow sets sights on 12th straight record close. PCLN - $1631.25, ATM straddle approx. $69, approx. 4.2%. Odd Block: Calls trade in CurrencyShares Euro Trust (FXE), calls trade in SPDR Euro Stoxx 50 (FEZ) and calls trade in Square Inc. (SQ). Mail Block: Questions, polls, and more. Options #QuestionOfTheWeek - #Oscars Edition. #WarrenBeatty screwed up Best Picture. What is your biggest #Options screwup? Held onto shorts too long Time decay killed me Gamma exploded in my face Vega snuck up on my delta Listener questions and comments Question from Gabe Rich - Hi guys. Do you know of any instance where automatic assignment/exercise by the OCC failed? I am selling a lot of put spreads lately and I have this nightmare that if the stock drops (market crush) and my spread ends up big time in the money. It will be assigned the short leg but not exercised the long leg. Thus creating a huge stock position that might be fatal. I just wonder if that ever happened, something along the lines of flash crush but for options. I am assuming this automatic assignment/exercise process is computerized, and it could be subject to failures. This could be an interesting discussion with your panel of experts, with decades of experience! Thanks, and looking forward for some thoughts. Comment from Game Daydog -Just had a successful vertical spread and wanted to thank you for encouraging me to step out of my comfort zone and try different option strategies. That Iron Condor is next, even though it sounds like a move from an old kung-fu movie! Around the Block: This Week in the Market: Feb 28 - GDP, International Trade, Consumer Confidence Mar 1 - Construction Spending, Beige Book Mar 2 - Jobless Claims Earnings this week: Tuesday - Target Wednesday - Best Buy Thursday - Costco