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| 5/17 |
| 2006/1/7-9 [Industry/Startup] UID:41285 Activity:nil |
1/7 How do options work? If you own calls which expire 'in-the-money'
do you have to exercise the option and and then have the option of
selling the stock, or do you simply get cash equivalent to the closing
value of the option?
\_ You either sell the option or buy the stock. Most options never
get exercised, though. By the way, if they expire it's too late.
\_ Won't most brokers exercise them for you though, assuming you have
the available cash or margin and they are in the money?
\_ options that are >= $0.25 in the money are automatically
exercised. and options on cash-settled indices (e.g. oex)
are automatically exercised if they are >= $0.01 in the money
and you get the cash equivalent
\_ i think the actual term is "above water."
\_ No that is for company issued options. He is referring to calls
and puts. |
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