[ 3 / biz / cgl / ck / diy / fa / ic / jp / lit / sci / vr / vt ] [ index / top / reports ] [ become a patron ] [ status ]
2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance

Search:


View post   

>> No.29875669 [View]
File: 433 KB, 554x788, sleep was a mistake.png [View same] [iqdb] [saucenao] [google]
29875669

>>29875590
Great.
The only things I did was buy food and sleep.

>> No.18832484 [View]
File: 433 KB, 554x788, sleep was a mistake.png [View same] [iqdb] [saucenao] [google]
18832484

>>18832346
>I meant that if you've written call options and want to buy them back to have zero net exposure to the underlying instrument
So to basically close the position with no strings attached.
>you'd still need to hold cash to be able to buy stock with your options in case the other guy wants to execute his, right?
Early assignment risk is very small. I was never assigned before basically market close on friday. Its just more profitable to sell an option, even for the buyer.

But now lets say you sold a call, it is ITM and the person exercised.
Do you need money if you hold the stocks? No. The stocks get sold for that price.
Do you need money if you have no stocks?Yeah, but: With a margin account you are allowed to go into debt or the broker will probably automatically close the position for you.

So lets say the 11$ option got exercised and the stock is worth 10$. You do not have enough money to cover the position.
Two things might happen:
-The broker asks you to sell stocks or transfer money into the account.
-The broker will, probably, immediately resell the stock and ask for the remaining money. In this case 100$

Depending on the account and broker you have

>Even if you've bought the same options at the market, you're still obliged to hold the terms of the contract you've written, I'd assume. The other guy made it seem like the buying part was the end of it.
Oh shit. I should have read this as well.
No no. You buy back the call.

1. You write the option
2. You owe sombody 100 shares at a 10$ strike on May 8th
3. You buy the same option
4. Somebody would now owe you 100 shares at 10$ on May 8th
You owe sombody 100 apples at first and somebody now owes you 100 apples.
The thing is over.

Its also 5am here, so sorry for bad writing

Navigation
View posts[+24][+48][+96]