How can I excercise a put or call option?
For example, I want to buy a call less than a month before it expires. The stock goes up beyond the strike price on the day of the expiration. I appear to have 2 choices, excercise it for the stock or sell the option. What should I do? How do I notify my online broker that I want to buy the stock?
Answer:
It is automatic if you havent sold the call. Even if you dont have enough money in your account to buy the underlying of the stock . You get assigned the stocks and they are automatically sold at the market openning the next business day, the bank will take the amount borrowed plus interests and you will get the profits made. If you have a cash account you can only buy options if you hold enough cash to buy the underlying.
Moreover, you need to take into account assigment fees. Discount brokers have really high fees which make more sense to simply sell the options. Meanwhile, for some full service brokers it is cheaper to pay the assignment fees than pay full comission.
sell the call.
or
call your "online broker" and ask. There are buttons to push to buy the call but no such obvious way to buy the stock. You might even try (shudder) a real broker.
Hello - If you want to exercise on the day of expiration it may actually happen automatically. The OCC (Options Clearing Corp) has a normal auto exercise policy if the underlying stock is 0.25 in the money past the strike price.
However you may want to double check with your broker to see if they have a different threshold.
http://www.investopedia.com/terms/a/auto...
Technically you have
name best book on basics of Futre & Option trading in stock market?
how do I obtain a stock certificate?
pl. suggest website to view indian-stockprices online?
When you have a savings account is the interest added on monthly or at the end of the year?
What are the advantages and disadvantages of using a foriegn bank for savings??
What do you think of gold stocks??
if i have 15000$ what can i invest in 2 days?
what is regulatory brokerage report and what is Proxy materials?
Answer:
It is automatic if you havent sold the call. Even if you dont have enough money in your account to buy the underlying of the stock . You get assigned the stocks and they are automatically sold at the market openning the next business day, the bank will take the amount borrowed plus interests and you will get the profits made. If you have a cash account you can only buy options if you hold enough cash to buy the underlying.
Moreover, you need to take into account assigment fees. Discount brokers have really high fees which make more sense to simply sell the options. Meanwhile, for some full service brokers it is cheaper to pay the assignment fees than pay full comission.
sell the call.
or
call your "online broker" and ask. There are buttons to push to buy the call but no such obvious way to buy the stock. You might even try (shudder) a real broker.
Hello - If you want to exercise on the day of expiration it may actually happen automatically. The OCC (Options Clearing Corp) has a normal auto exercise policy if the underlying stock is 0.25 in the money past the strike price.
However you may want to double check with your broker to see if they have a different threshold.
http://www.investopedia.com/terms/a/auto...
Technically you have
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: