Cash secured put assigned by strike was not in the money

LOL , BE traded all the way down to 256 by 4:30 pm. OP doesn't understand how options work on expiry day. Live and learn.

Learn how options work before trading, stock dropped below the strike price after market close. Options can be exercised up to 5:30pm ET. Would of happened in any broker.

The most important thing to know is you sold an option, and the owner of that option has the right to exercise it at any time regardless of the underlying price.

Random assignment from the clearinghouse, sofi has nothing to do with it.

Because it went well ITM after hours. The long person has until 530ET to exercise it. This is why you don’t hold into after hours and pay the little bit to close it.

what did it do after hours?

The OCC will automatically exercise any option ITM by 0.01 or more based on the cash settle price from the primary exchange. This is to avoid making all option holders give notice of their intention even if the options are deep in the money. The OCC will accept "contra-exercise" notice until 5:30 ET / 4:30 CT from long holders to instruct the opposite (i.e. to exercise an option that was OTM at cash close or to not exercise an option that was in ITM at cash close). The short option holder is technically at risk all the way till 4:30 CT. HOWEVER, from a practical stand point, long option holders are usually given an earlier cutoff time (usually sometime between 3:30 and 4:00 CT) by their broker / middle office team to make sure that all the proper audits and paperwork can be done and submitted to clear the OCC 4:30 CT cutoff. Some broker / middle office teams may be able to work on a tighter time frame , but usually only on a best efforts basis / if the economics are very large.

Once 4:30 CT has passed , the OCC will collect all the data it has from long holders and randomly assign out exercise notices to short holders. Then those short holders will randomly assign out exercise to individual account holders. This also takes time, so you usually wont see your account updated till 7:30 CT / 8:30 ET at the earliest Friday evening ... some brokers might not update your account till the next day ... by which time it is too late to trade out of any unexpected positions.

In your case, BE trade FAR ITM during after hours trading, I would expect all shorts to have been exercised. If on the other hand BE traded around the strike in a tight range during after hours trading, its possible that some shorts might not be assigned.

The uncertainty around whether you are long or short shares at expiry based on market movements around the strike is pin risk. To avoid it, close your options out before end of trading on expiry day.

Didn't you check some box stating that you understand the risks of options? My broker even sent me a pamphlet explaining all the mechanics and risks. Didn't yours do that?

Bloom was one of the stocks being consdiered to be added to the S&P. When this didn't happen the stock fell substantially after hours. This caused the owners of the 282.5 puts to manually exercised their options.

I understand what you are saying, but it would be very difficult to implement and would cause other added problems.

Here is the way the process works now. Long holders have until 530pm et to decide to exercise an out of the money option or cancel the exercise of an in the money one. The OCC will them tabulate the results and notify the brokers. The brokers will then notify their customers. Each broker will have their own policy on who is assigned, usually random but it can be another method such as FIFO.

You're saying when the OCC tabulates the results and working with a broker determines that whoever is assigned now should have a corresponding put/call exercised, if that owner has elected that. This would now come far after the original deadline of 530, and may cause others to be affected, when they were not originally.

This risk of unknown assignment can be very easily controlled simply by closing the short option before the close of trading.

The OP's short options could not have been closed at anywhere close to .01. Since the stock was being considered for inclusion in the SP, there was substantial premium in them, even on the close of trading.

My 2 pennies, don’t sell a csp unless you want to own the stock. And learn more about timing, volatility, and when to sell one.

Playing the way you are, you’ll have good runs and then one bad trade wipes it all out. BE at these levels, I’d be doing everything I can to sell and get out even if it’s for no gain or very small loss. Better than all 26k going back down to $2000.

Lastly, gotta be ok getting assigned a strike that’s higher than market. Hence selling puts only when I want to actually own the stock. If you’re mindset is to be long on the underlying, it’s a much easier game to play

Exactly. It wouldn't make sense to exercise outside of the strike because you're losing money. I think the timing confusion is because the time when options are tradable and exercisable are not the same. This usually doesn't matter except in specific times like this when the strike moves in range after close on the day of expiration. This can happen on any broker and assignment is random

Don’t trade options if you don’t know how they work. The owner of the right to option, not you (the seller).

I don’t know if SOFI has some options education curriculum but that may be a good first person to talk to. Options expire at 5:30 when the price was around $253.