Selling options

Discussion in 'Trading' started by Khaled187, Feb 13, 2007.

  1. If i sell options, how long before the expiry date should i buy them back? And what would happen if I dont buy and the expiry date arrives?
  2. If you need to ask those questions, you'd damn sure better not be playing naked options.

    When you instantly know all the answers to every scenario cold, awakened from a sound sleep, feel free to proceed.
  3. First, based on those questions, do not ever sell naked options :D.

    Second, the answer to your question is..... it depends.

    Depends on whether the option is far out of the money, slightly out of the money or even in the money, etc, on what your intent was (short put to own stock or just collect premium), what the stock is doing, yada yada yada..

    If you do not buy back the option and it is ITM you will be assigned on the short option and either be short stock (for naked call) or long stock (for naked put) in your account.

  4. I agree with the above posters. Don't sell naked options if you don't understand those basic principles. See if your broker has any training webinars or articles they can provide you.

    You can also check out some free websites like, or

    They should help you get at least a basic clue. I also recommend the options books by Sheldon Natenberg, although you should stay away from anything by John Najarian.