okay so lets say I have a 30k account and i am long 2 ITM GOOG calls.........if at expiration I don't have enough money in the account to buy 200 shares of GOOG at the strike price then what happens?
1) You buy 200 shares by automatic exercise. 2) You get a margin call 3) You sell the GOOG shares. Revenue for the broker. Mark
If they're ITM, sell to close for whatever they're worth. If they're OTM, instruct your broker not to exercise. If you do nothing, you expose yourself to a whole weekend of risk for no gain. The thing about pin risk is that GOOG has surprisingly big pins.
that's right. you know nothing. arrogance and ignorance go hand in hand. so STFU and move on. EDIT.: Jahajee called me a while back to let me know that she made a fortune with naked calls on leh over the weekend. another genius.
I haven't been on ET in a couple of weeks. But, in light of today's events, I thought I'd stop by this thread. I was wondering are those who were proponents of naked put sales, are you still proponents? Or even covered calls or cash secured puts? Don't get me wrong I love options. Use them all the time to hedge the underlying. Which for a trader like me they are best used for. Oh, I know what popular literature says, that covered calls are hedges. Not in my book.