can occur when a company makes an adjustment that affects the...

can occur when a company makes an adjustment that affects the share price, example, when BHP / WDS , some option series went from 100 to 104, need to be aware of it, as can happen to a series you have running, & if the option is exercised you then need to buy those 4 shares per option to fulfill your end of the trade, why these days when I sell a covered call I tend to use Euro type as they cannot be exercised until the expiry date, however, you can trade them at any time during their continuance. If buying uncovered I use American style as the premium generally is a few % better.