Gentleman Outlaw

🧯 Make Your Own Machine Part 6: What Happens If My Shares Get Called Away?

So you’ve sold your first covered call. You collected a nice premium. Life is good.

But then — boom đŸ’„ — the stock price jumps and you see a notification:

“Your option was exercised.”

Cue the panic: â€œWait, did I just lose my shares?!”

Yep
 but hold up. That’s not a bad thing.

🧠 What Does It Actually Mean to Get “Called Away”?

When you sell a covered call, you’re making a deal:

“If this stock hits $X by Friday, I’ll sell it to you at that price.”

If the stock stays below that price? Nothing happens. You keep your shares and the premium.

If the stock goes above that price? The buyer can exercise the option. That means:

  • You sell your shares at the agreed price (called the strike)
  • You still keep the premium you got up front

This is called having your shares called away â€” and it’s part of the game.

💰 Clean Example

Let’s say:

  • You own 100 shares of RUM at $7.50
  • You sell a $9 call and collect $15
  • RUM closes at $9.20 by expiration

Here’s what happens:

  • Your shares are sold at $9 = $1.50 profit per share = $150
  • You keep the $15 premium

Total profit: $165
(22% gain on a $750 investment — in one week.)

😬 But What If I Didn’t Want to Sell?

Totally fair.

If you’re trying to build a long-term position — say, stacking up to 200+ shares like I am — you might prefer to keepyour shares.

So here’s the good news:

🔄 You Can Avoid Assignment (Sometimes)

If it looks like the stock is going to hit your strike price, you don’t have to just sit there and let it happen.

You can roll the call â€” which means:

  • Buying it back early
  • Selling a new one at a later date or higher strike

That’s called rolling a covered call.

We’ll go deeper into how to do that in a future post — for now, just know:

  • You’re not locked in
  • You can adjust your position if you want to hold your shares

🔁 What I Do When It Happens

If I get assigned (shares called away), here’s my move:

  1. Celebrate the win — I made premium and capital gains.
  2. Watch for a dip — and buy back in when the price is right.
  3. Keep the engine running — sell a new call once I’m back in.

No panic. No drama. Just rinse and repeat.

This strategy works because you’re not chasing the market — you’re managing it.

🧠 Bottom Line

Getting called away isn’t a loss — it’s part of the plan.
You either keep your shares and your premium, or you sell your shares and still get paid.

And if you want to avoid it next time? Rolling gives you options — literally.

We’ll cover that soon.

👉 Up Next: [Post 7: Why I Chose RUM (And What to Look for If You Pick Your Own)]
Want to see how I handle real trades like this? Check out the FIRE Engine blog.