So I trade a lot of ITM credit spreads and get early assigned a couple of times a month. I normally just do a covered position for the same credit as my long position or better. Now Since some of these positions are pretty far out(just got assigned 48 days out on a put this morning) I had an epiphany. If I can close my long for the same credit… why not do the same short position to close it… but on an earlier date. That way I would still have more value from the new calendar spread I created for the same cost I would have had to just close the position. Why did I not think of this before?
Normal covered position to close early assignment. Short put is on same date as long.
Same covered position to close early assignment, but the keeping my long and creating a calendar spread.