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If I let my option expire ITM (Bought Put Option) I will then own those shares. My account won't allow me to do covered calls or covered puts so I can't leverage against them. What are my other options to earn capital off the shares or should I exercise before expiration?

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  • It's almost always more profitable to sell the options and buy the shares than to exercise the option early.
    – D Stanley
    Sep 22, 2022 at 14:19
  • Confusing wording in this question. Owning a put gives you the right to sell the shares so you don't end up with shares unless you already own them. If that's the case then you're not "earning capital off the shares" because a long put is a debit. If you sold a put and it expired ITM, then you'd acquire the shares. Clearer details needed. Sep 23, 2022 at 0:58

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You bought put options which are now in-the-money, so you have 3 choices:

  1. Sell the put options to close your position

  2. Exercise the put options (sell the relevant shares). If you don't have any shares to sell, perhaps your broker will lend you the money to sell them short.

  3. Let the put options expire in-the-money. Your broker may try to exercise them for you (#2 above) or sell them for you (#1 above): "If you don’t have enough of the underlying shares, we may attempt to sell the option." - Robinhood https://robinhood.com/us/en/support/articles/expiration-exercise-and-assignment/

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