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My broker closed my position. Why, and can I stop it?

Brokers close positions when your account can't cover the risk, most often on expiration day or in a margin call. You agreed to this in the account terms. Here's how to stay out of it.

Options guide · 8-minute read · Updated 2026-10-26

Why a broker closes your trade

A broker closes a position for you when it thinks your account can't carry the risk. It's usually called the risk desk or the margin desk. It doesn't need your OK. You agreed to this when you opened the account.

It isn't personal, and it isn't a punishment. The broker is protecting itself from a loss you can't pay. The bad news is that it closes at whatever price is there, not the price you'd choose.

If you run the wheel strategy fully cash-secured, this is rare. It mostly happens when something isn't covered.

The three usual reasons

1. A margin call. Your account value dropped below what the broker requires. If you don't add cash or close something fast enough, they close it for you.
2. Expiration day, and you can't cover assignment. Say your short put is in the money, but the cash isn't there to buy 100 shares. Some brokers close it in the last hours of the day rather than let it assign into a deficit.
3. A restriction on the stock or the account. A stock becomes hard to borrow, an account gets flagged, or permissions change. Less common, but it happens.

Exact rules differ by broker and change over time. Check the broker's current help pages for how and when their risk desk acts.

The margin case (an illustration, not a trade idea)

This is the one that hurts most, because it often happens on the worst day.

You have $10,000 in a margin account. You sell three 30-day $50 puts on a made-up stock, XYZ, for $1.00 each. You collect $300. Fully cash-secured, that would need $15,000. On margin, the broker only holds part of it, say about $3,000 total in this example.

Then XYZ gaps to $40 on bad news. Each put is now worth about $10.50. The broker's margin requirement jumps, because the puts are deep in the money. Your account shows a big loss, and you get a margin call.

You can't add cash in time. The risk desk buys back all three puts at the ask.

Look at the last two rows. The forced close locked in a loss of almost $3,000, close to a third of the account. One cash-secured put at the same strike would have shown −$900 and left the decision with you.

The stock didn't do anything different. The size did.

Expiration day closes

The second case is quieter.

Your put is a little in the money late on Friday. Your cash is spread across other trades, so you can't afford the $5,000 of shares. The broker sees a likely Assignment it can't fund, and closes the put before the bell, at the ask. Some brokers do this hours before the close.

You might be fine with the loss on the put. What stings is the price: late-day spreads can be wide, and you didn't get to choose. Our page on what happens when it expires in the money by a penny covers the close-for-pennies habit that avoids most of this.

How to prevent it

• Keep every put fully cash-secured. Strike × 100 in cash, set aside, for every put. This alone removes most forced closes.
• Leave a buffer. Don't use every dollar. Many sellers keep a slice of the account in cash that's never committed.
• Close or roll in-the-money options before expiration day. Make the decision on Thursday or early Friday, on your terms.
• Know your broker's rules. Read how they handle expiring positions and margin calls. Some send warnings; some just act.
• Read every alert. A margin or "expiring position" message is the broker telling you a close is coming.

If you trade from a margin account, our guide to cash vs margin accounts for selling options explains the difference in plain words.

What to do now

1. Find the trade confirmation. Note the price and time of the forced close.
2. Work out the real loss in dollars, premium included.
3. Read the broker's message or help page that explains why. If it's unclear, ask support in writing.
4. Check what else is open. Is any other position not fully covered? Fix that today.
5. Write one line in your journal: what was uncovered, and the size you'll use next time.

If the loss is big, take a break before the next trade. Our page on when to stop selling options for a while sets a pause rule.

Questions