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Zecco.com » General Investing » Options Trading » How do I exercise my in-the-money c...
Last post 04-29-2008, 11:42 PM by gablaw. 17 replies.
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  •  04-22-2008, 5:55 PM 27621 in reply to 27494

    Re: How do I exercise my in-the-money call option?

    Reply Quote
    I would also like to know about this Same-Day-Exchange. I am interested in buying some put options for protection. If I hold them to the expiration date and they were in-the-money, could I buy the stock and the current price and then sell immediately at the strike price and make the difference even if I don't have enough money to buy the stock in the first place?

  •  04-22-2008, 8:47 PM 27631 in reply to 27621

    Re: How do I exercise my in-the-money call option?

    Reply Quote
    I hope I can explain this well enough so here goes.

    You can excercise an option at anytime, even before expiration.  You would only do this _if_ you really want to own the stock.  If you just want to close out the option then sell it back to the options market if possible.  If there is no buyer for the option (which isn't that likely unless it's a thinly traded stock) then yes you can exercise and sell the stock back to the market. 

    Never excercise an out of the money option.  I can not think of a why you would ever do this.

    Buying Put protection does not mean you have to exercise the option to benefit from the put.  If the put is in the money near expiration or at any time, just sell the Put back.  Again, if for some reason there is no one buying your in the money put then yes, exercise it.

    If you need to exercise early, call the Zecco trading desk and they can exercise for you.  If you have a put that is .05 cents in the money, it will be automatically execised for you the day after expiration.  You will see 100 shares of stock for each Put show up in your account that were bought for you at the strike price of the put option.

    Again if you exercise the option and sell the stock the same day it shows up in your account (or the first day the market is open) you won't get a margin call and you should not be charged any margin interest.


    Hole that helps.
    -Sean

  •  04-29-2008, 11:42 PM 28051 in reply to 25917

    Re: How do I exercise my in-the-money call option?

    Reply Quote
    Occasionally a deep in the money option won't sell for its full intrinsic value and a SDE is more profitable than selling to close the option.  I have done this.
    Btw, I suggest you don't mess with options until you understand them.
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