Sharechat Logo

Forum Archive Index - March 2004

Please note usage of the Forum is subject to the Terms & Conditions.

Messages by Date [ Next by Date Previous by Date ]
Messages by Thread [ Next by Thread Previous by Thread ]
Post to the Forum [ New message Reply to this message ]
Printable version

Re: [sharechat] Option trading

From: "Cristine Kerr" <>
Date: Mon, 22 Mar 2004 15:55:32 +1000

ASX as heaps of excellent info on their website.
If all else fails, try;
----- Original Message -----
Sent: Monday, March 22, 2004 3:21 PM
Subject: [sharechat] Option trading

I have been doing a bit of reading about the use of options as an alternative to buying the underlying stock. However, I can't find anywhere the answer to the following question.

If I decide to directly sell a call option (after I have initially bought the option on the market) before the expiration date (and not purchase the underlying stock), am I then required to purchase and deliver the underlying stock to the person who has bought my call option if they decide to exercise the call (before the expiration date)?

A simple question indeed but my reading provides no clear answer. Obviously, you can make a profit if you sell the option directly (rather than exercising), but there appears to be a huge risk if you have to deliver the stock at the strike price once you have sold it. Is the answer that you can simply 'close' the option (and take the money) and the call option then ceases to exist without any further obligation?



Messages by Date [ Next by Date: [sharechat] Options trading Paul & Eunice
Previous by Date: RE: [sharechat] Option trading Baa Baa ]
Messages by Thread [ Next by Thread: Re: [sharechat] Option trading Paul coykendall
Previous by Thread: [sharechat] Option trading Paul & Eunice ]
Post to the Forum [ New message Reply to this message ]