Last week, I bought 50 $18/$19 bullish call debit spreads on $HOOD expiring 5/24 proof. This means I:
- Bought 50 of the $18 calls
- Sold 50 of the $19 calls
This transaction cost me $0.90, and I get a maximum profit (Value goes to $1) if Robinhood closes above $19 and lose it all if robinhood goes below $18 on the strike day (value goes to 0) with a sliding scale in between.
The strike expiration day comes and robinhood closes at $20.50, which is good news for me because that should be maximum profit. What should happen at this point is robinhood exercises all 50 of the $18 calls (causing me to buy 5000 shares of robinhood) and then assigns the $19 calls (causing me to sell 5000 shares of robinhood) and I end up with $5000 in the bank.
Instead, what happened was Robinhood did exercise 50 of the $18 calls, but only assigned 49 of the $19 calls. This means instead what happened was I bought 5000 shares of HOOD at $18 proof, was forced to sell 4900 shares of HOOD at $19 due to assignment proof, and am left with 100 shares of hood and $3100 cash.
Because HOOD trades above $19, the 100 shares of HOOD are worth more as shares than as cash. As of close friday, the total net of my trade is $3100 + 100*(20.50)= $5150 which is more than the theoretical maximum profit
Basically robinhood gave me free money or something. Can someone confirm
I think Robinhood forgot to assign one of my calls and now I have free money i think
byu/smellyfingernail inwallstreetbets
Posted by smellyfingernail
32 Comments
Lemme send this to RH real quick so they can fix the error
Sometimes calls aren’t exercised even if they are ITM, maybe the person holding it didn’t have enough money or simply didn’t give a shit, so that 1 call that wasn’t exercised you profited off of 150$
Why would you tell anyone about this?
That’s wild. I never got this lucky with RH spreads lol.
> _”expiring 5/24″_
So this past Friday and RH has until Tuesday market open to clean up anything not properly resolved.
The real test to see if you’re right is to wait until market open.
Etrade does all kinds of stuff to my expiring options when the next day isn’t a market day. The only thing that matters is they clean up everything `before` the next market open.
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Wait and see what it looks like a half hour before market open. It could just be there’s a slight glitch with the assignment of the final call. If you still have the shares at market open, then yes you’re correct and you should be able to sell them at market price and “pocket” the extra money. To me, it’s not really free money because you were assigned risk in the price of the stock changing over the weekend, but a win is a win 👍👍
Its because of memorial day I think. Did you serve in the military? Sometimes on holidays Robinhood does this for select individuals . One time they took $200 from me that I didnt actually lose as thats imposible so I assume it happens to everone . Just luck if its up or down right? Congrats
No it’s the weekend…you’ll get assigned
They will undoubtedly correct the error, maybe tomorrow, maybe next week, maybe even next year.
This will probably be fixed tomorrow. But the most amazing thing about this story is that you are risking 0.90 to make 0.10. Truly regarded.
Lmao I imagine all these regards reading your description of spreads and asking
“you can do that?!?”
RemindMe! 24 hours
Interesting if you can withdraw right now… Could be a weekend processing delay?
It will show up on market open Tuesday you idiot.
First time with spreads over the weekend?
any cap here who can link me the legendary post about the guy who also thought he had a free infinite money glitch?
good ol’ times of wsb
Incoming Robinhood collector 🐎
I don’t know what math you’re using, but with a $0.90 debit for the one uncovered call, the only “free” money you would be getting at $20.50 is $160, plus the 49*$0.10 profit from the other 49 covered calls, and that’s only assuming you’re able to sell at $20.50. Your total gains are $650 – fees and commissions. I’d wait until markets open tomorrow before you get too excited, I’m pretty sure computers don’t “forget,” but it’s not beyond possibility to be a glitch. They’ll catch it eventually, you don’t have to worry about it. 
Seems weird but the net from your trade probably covered the auto exercise of one of the long calls that is why it happened this way . It’s all automated . If your call closing . 01 itm then it will get exercised
100% will be fixed tomorrow, same thing happened to me and it was fixed by 9:30 the next market day
This is called pin risk and seems like you just got lucky. Think about the opposite scenario where after assignment the underlying stock price drops instead of staying in the money
It’s the weekend. It will be sorted out when market opens again on Tuesday.
Trust me, you’re way too regarded to find free money.
The dude that was supposed to settle that one option had to go fuck your wife Friday afternoon. He’ll take care of it during business hours this week.
If it weren’t a 3 day weekend I’d agree but DO NOT place any orders with those shares til Tuesday when everything is reconciled
This is very simple. Whoever bought one of the $19 calls sent a Do Not Exercise request to the Options Clearing Corporation for whatever reason before 5:30pm, so you got lucky and one of the options you sold was not exercised. No glitch, just intended behavior. Congratulations!
Remind me!
This is why we can’t have nice things
On one hand, this sounds stupid AF. There’s no human doing this stuff, it’s software. On the other hand, WSB was built on finding and exploiting glitches in Robinhood. [There’s a whole section about on Wikipedia.](https://en.m.wikipedia.org/wiki/R/wallstreetbets) So best of luck.
PS: For any apes out there, the only reason your favorite meme stock squeezed was because everyone was exploiting Robinhood. The moment you left for other brokerages and DRS’d your shares, the momentum died. Using $100 of cash to buy 1 share forever is not remotely as squeeze-y as using $100 of margin to buy 10 call options to control 1000 shares for a week. Y’all got tricked. [The funniest part was that Citadel, Fidelity, and Schwab later formed a joint venture on a crypto dark pool.](https://www.wsj.com/articles/crypto-exchange-backed-by-citadel-securities-fidelity-schwab-starts-operations-597f6d46)
Lucky bastard I always wish for free money to but so far nope
It is supposed to be automatically exercised given the price is well above the strike. But who knows if there are some particular ask from the call holder. Wait till tomorrow if you actually see the 100 shares, the try to sell it so you can pocket then profit. Until then I think you are safe for the free gift.
No you 20 iq regard. Exercising 18 call means you pay 18 to buy, you should have sold 100 at 19 but they didn’t exercise so you made all of 100 bucks more when price is 20.