Hi, i am a purchaser of a put ( i bought to open) and i don`t have the underlying stock at expiration. If the option is in the money that`s mean i just loss the oportunity to sell stocks at better price that the market and obiously the contract`s prime? If the above is correct, i would like to know if i need to do something on my bróker or just let it go. Thanks in advance!
If it is was an open position on expiration day you will automatically be exercising the option according to OCC any option 1 cent or more in the money is subject to automatic exercise. This means you should be short stock in your brokerage account by saturday. This is why you need to manage open positions on expiration day, either by notifying your broker and over the phone providing a do not exercise instruction or close out your open positions to avoid pin risk. Most brokersges offer commision free closing trades on expiraiton day if they are 5 cents or less.
Well recently i bought this put with the most closer date of expiration thats mean 27 days and its open interest 90, just to sell contract. Now the stock is nearly to go down (like i hope) but I dont have the money to buy it and sell it on the expiration at the strike price. Do you think i Will have problems to sell the contract with this open interest quantity ? Best regards!
The stock is CNSL that i will have to buy it at expiration date maybe in $11.00 and sell it to the writter at the strike price of $12.50 but like i said i won`t have the money to buy it ($1,100). So, since my account is marginable i hope the bróker loan me the money or try to sell the contract between Nov'26th and Dec' 21th.