So I just sold my first covered call a few weeks ago, and as you know today is expiration. I sold it when the option was out of the money, but on expiration, the option is about a dollar in the money. (It was fine for me because I was planning on selling the underlying at the strike price anyways.) I was expecting to lose out on a dollar (times number of shares) in profits and only make money on the premium because I was thinking the other guy would exercise the option. Lo and behold, I still have the underlying. So can I now sell it and make a dollar in addition to the premium I made in selling the option? Do you know if it takes awhile for the option to be settled? I hope on Monday I'll still have the underlying. After thinking about it, it does make sense for the option buyer to just sell the option before market close and not take on the added risk of owning the underlying. Is this a common occurance?
In reality, options expire on Saturday night and not on Friday (yes they do stop trading on Friday though). Your in-the-money option (and stock) will be gone on Monday, and you will end up retaining the premium. Cheers