thanks cvds16, Does it mean that I use the friday's close price and my option strike price to calculate my option's value? Thanks,
If i have the put option on individual stock(xyz) with strike price $45, for example, The friday's morninng open price is $44, and close price is $46. Should I use $44 or $46 to see if my option is in the money? Thanks again
what you really should use (not possible for most private investors-because they have to exercise before the close) is what you are going to guess where the stock is opening on monday. That's the real in the money. Normally you just use the close. Looking at your questions you probably should read some more on this before you start trading these things.
Most of the time its probably better not to exercise and just sell the options in the market somewhere before expiration. There's theta in these things ...
nice story i heard when i was working on the floor in Amsterdam: lots of mm exercised their "out-of-the money" puts in october 1987, when they realised the markets where going to open much lower on monday. Took some people by surprise.