if i have a 10000 $ non margin account, could i have sold 100 contracts @ the 500- 510 option call spread. what would happen for contracts being exercised before the position could be closed? with options expiring in one day, would a broker allow such a large position? if a contract was exercised, would the broke automatically exercise an option u own to offset the short? in aftermarket, when options r closed in u.s., can profits be locked in in a foreign market with an off setting put spread? what markets would be open after 4 pm eastern time u.s. and what markets recommended?
To sell a spread you need a margin account. If you have the margin (i.e. buying power) then there's no reason for the broker not to allow you to do it. Besides 100 contracts is hardly a large position. No, your broker will not exercise the long call for you prior to expiry unless you request exercise. Automatic exercise only happens at expiry. Sure you can hedge with other instruments in other markets, if you have the opportunity to do so. By the way, if you sold a 500/510 call spread then you don't have any profit to lock in since the stock was trading at 525 in afterhours and that means a max loss for a short call spread.
100 contracts of GOOG is hardly a large position? I think the OP meant 1 contract of 100 shares. But still it is a LARGE position for most ETer. LOL.
what i meant was buying the 500calls and selling the 510s. thanks fr reply, it was good. is there a way to lock in profits in a bull / long spread with aftermarket earnings release?
That's buying a spread then and it would've worked well, obviously with hindsight it would've been better to just buy the 500 call. Still the answers apply, and I'm pretty sure you still need a margin account to buy a spread. You can't lock in profit in the US market, but if you can trade in some overseas market that has Google options then you can buy a 500/510 put spread or sell 500/510 call spread. However, the move is pretty big so unless you expect the stock to reverse the whole move you can easily just let the spread expire or at least wait until the US market opens.
There is no way to lock in the spread profit until the options market opens. You dont have to worry about being assigned overnight on the sort leg of the spread since there is no reason for the holder of the short leg to exercise those calls a day early. You can buy a spread without margin. 100 lot is not a big position, but "big" is a relative term. Options in other markets are not fungible with the US listed options so its not a pure arb.