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Started By
Message
Help with options please
Posted on 1/27/21 at 5:06 pm
Posted on 1/27/21 at 5:06 pm
Asking for a friend (really)
If he has a deep in the money call for AMC (like $5) for this Friday, what happens if he holds it until expiration?
If he has a deep in the money call for AMC (like $5) for this Friday, what happens if he holds it until expiration?
3
Posted on 1/27/21 at 5:09 pm to bayoubengals88
he will have the right but not the obligation to buy 100 shares at $5
Posted on 1/27/21 at 5:11 pm to cgrand
quote:Thanks, which can immediately be sold at whatever the market price is?
he will have the right but not the obligation to buy 100 shares at $5
Posted on 1/27/21 at 5:16 pm to bayoubengals88
if he exercises before close friday he can sell friday. If he lets it exercise on its own he wont be able to sell til monday, yikes. Tell him to just sell the contract before close friday
Posted on 1/27/21 at 5:17 pm to bayoubengals88
He doesn't need to wait until expiration
Posted on 1/27/21 at 5:26 pm to thatguy777
quote:
If he lets it exercise on its own he wont be able to sell til monday, yikes.
Can we get a bit more detail on this? I have a 2/29 call on SPCE. Let's say I forget about it until Monday. What happens? Am I just out the money? Does something automatically happen?
I watched a bunch of videos and read a bunch of stuff yesterday but none of it got to that level of detail.
Posted on 1/27/21 at 5:38 pm to Chucktown_Badger
quote:
I have a 2/29 call on SPCE. Let's say I forget about it until Monday. What happens? Am I just out the money? Does something automatically happen?
You mean 1/29? If it expires in the money (ITM), your broker will automatically exercise it to purchase the shares, even if it's only ITM by 1 cent.
If you don't have enough money in your account to cover the cost of shares, you'll be margin called.
If it expires out of the money, it's your total loss on the trade.
Posted on 1/27/21 at 5:40 pm to Chucktown_Badger
typically if you buy a call and it finishes in the money on friday at close the brokerage will just go ahead and exercise the option. You can instruct your brokerage not too of course. But if you forget and do nothing with it the call would likely be exercised and you will get 100 shares at whatever the strike price you bought the call at. In this case if that were to happen the guy stands a chance of AMC gapping down monday and him losing money
This post was edited on 1/27/21 at 5:40 pm
Posted on 1/27/21 at 5:57 pm to thatguy777
Helpful info. Thanks.
Posted on 2/26/21 at 2:50 pm to bayoubengals88
Did you figure out the Options market yet?
Posted on 3/1/21 at 9:12 am to MrLSU
Always (ALWAYS) have a plan of action BEFORE you make the trade. That’s true whether you’re buying or selling.
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