LEH puts after BK (newbie quest.)

Discussion in 'Options' started by DanR, Sep 19, 2008.

  1. DanR


    Hello all,
    what would happen if some LEH puts (bought i.e. when LEH@10) would have been kept up to now?
    Is there still the possibility to cash the gain?
    Otherwise which should have been the right day to sell them in order to get the maximum profit?
    Thanks in advance.
  2. Yes, it's easy to cash in on the gain.

    1) exercise the puts.
    2) Buy stock at a few pennies per share to cover the short position.

    If shorting makes you nervous, buy stock first, then exercise the puts.

    Yes, you are allowed to exercise puts. That is not considered 'selling short.'

  3. you could sell to close the puts for the premium. for example the sep 10's are at $9.90
  4. I doubt that's the BID price.

    But, yes selling is always a choice. I assume that one would be forced to sell under parity, and that would be silly.