Should I exercise or Close out IMAX

Discussion in 'Options' started by prophetMan, Dec 1, 2010.

  1. I am in the Money with the DEC 10 20 CALL for IMAX. (1 contract)

    Should I close out the option and take $435 profit or exercise and buy @ the $20 strike price and sell at current market price of $27 and take $700 profit (not taking fees into consideration yet)
  2. That sounds like a once in a lifetime arb opportunity: exercise one way for a $700 profit or close the opttion for only a $435 profit. :)

    Here are two tips:

    1) Read more about options
    2) Short the stck and exercise a deep ITM call like this if it trades enough below intrinsic to yield more than just closing the call (slippage and commish)
  3. thanks for your input, I decided to close out the options instead of exercising.. I didn't have enough funds to cover the cost of buying the shares