Questions tagged [option-exercise]

In options trading, the option holder has the right but not the obligation to buy or sell the underlying instrument at a specified price on or before a specified date in the future. Exercise means to put into effect the right specified in an option contract.

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Bought Put Options that are getting close to Expiration

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 ...
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How much are my shares worth in the startup I work for?

So I joined a startup last year. They gave me 50,000 options (ISO) with the exercise price of $0.4 per share. Currently I do not how many shares the company has in total, but in the print of the ...
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Exercised stock options, the company was bought/merged after several years, my stock was sold - what are my tax implications?

I bought the options I had vested in the Company upon leaving (United States). After several years the Company was bought/merged into another, and my stock was paid out. From my understanding: The ...
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If I exercise an ITM put option in an account with zero positions open, will the put option exercise if I have adequate capital in my account?

I only buy puts. I now have a question about exercising puts. I am not able to exercise puts in my simulated account, so I wanna ask you guys & gals a question before I try it on my real account. ...
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Can American Option Be Exercised After It's Not ITM Anymore

If an (American style) option enters the in-the-money price zone on a day while the person holding the options contract isn't paying attention to the market, and later on (let's say the next day), the ...
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What is the Arbitrage opportunity with American options and European options here?

Suppose that the current stock price is $100, the exercise price is $100, the annually compounded interest rate is 5 percent, the stock pays a $1 dividend in the next instant, and the quoted call ...
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Long ratio put spread versus call strategy for stock of ABC company

Part(1) Long ratio put spread versus call strategy for ABC company Current market price:$639, view: moderately bearish Buy 2 February 630 Puts@ 35.00 Sell 1 February 660 Put@ 52.00 Sell 2 February 690 ...
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Is the strike price on the day when option contract is written equal to the price of the asset?

I am learning options theory and I am trying to understand how the strike price of an option is determined initially. Am I right that on the day the option contract is written, the strike price is ...
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'iss' function in "FinCal" package in 'R'

Following is the 'iss' function in "FinCal" package in 'R'. iss: calculate the net increase in common shares from the potential exercise of stock options or warrants. Description: calculate ...
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How does expiration/assignment work in synthetic covered call

What happens if I let a short call expire worthless on a synthetic long stock I've purchased. Here's my scenario. Bought a CALL @ 870 and sold a PUT @ 870 both expiring in 177 days. Also sold a CALL @ ...
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How to manage covered call position when stock price goes down

So let's say you have a position like this bought 100 shares of XYZ at $50 sold 1 covered call at $55 strike, received a premium of $2 stock price goes down to $35 now premiums for strike prices ...
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Exercising Adjusted Puts

I am at a loss for what to do about this situation that I "thought" I understood before the Ex-Date happened. I was capitalizing on the 2.25 dividend that SSSS announced. I bought over 200 ...
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Can I make use of my wife's Capital Gains Tax Allowance for gains under an EMI Share Option scheme?

My employer has granted me a number of share options under an EMI scheme. They also partnered with their brokers to allow us to exercise these options without needing to put up-front capital in to ...
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Is there capital loss on called shares

I bought 100 shares of XYZ at $12.35 for a total cost of $1,235. I then sold an $11.50 call for $1.15, collecting $115. If assigned, will my sale price for the 100 shares be $1,150 realizing an $85 ...
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Option chain with nil bid quantity and price

Let's assume I bought a call option ABC CE @.50 and now its value is @.10. There is no bid price or bid quantity. Am I able to sell the option at @.10 anyway?
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Taxes when exercising an option (not ISO)

Nearly all of the information that I can find online on option exercise and taxes are related to employee stock options, where you do get taxed on the gain (even if on paper) between the strike price ...
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Availability of proceeds from the exercise of a long put

If I bought a put option in a cash account, it expired ITM and was exercised automatically on Friday, could I use the proceeds on Monday or would I have to wait T+2 working days until Wednesday for ...
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Should I exercise my options to buy stock in a company not yet trading publicly?

I used to work for a start up that offered stock options which I haven't been able to afford to exercise until now. I'm very new to stocks so I'm not 100% sure how it works. Currently, I'm able to ...
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Who provides the shares for exercising a put option?

I am trying to get into investing and have some questions about options. If I buy a put option (which would be an option to sell stocks as far as I understood), who will provide the stocks to sell if ...
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Trading with options and turn in profits

Yesterday I read an article about how someone was able to turn $ 200 into $ 113,000 in just one day by buying call options on a particular stock. The article also showed a screenshot which appears to ...
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Can I sell the stocks acquired through call to open option in any quantity and at any time or do I have to sell through (put) options only?

Can I sell the stocks acquired through call to open option in any quantity and at any time or do I have to sell through (put) options only? Also, are stocks purchased through option eligible for ...
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Does exercising an option count as a gain?

I’ve always only sold options that I’ve had in the money. Of course sale of an option is income and will be taxed as such (assuming it’s been held <1 year). Now, for the first time, I’d like to ...
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If options gives you the RIGHT but not the OBLIGATION to exercise them, then why are they being forcefully exercised if they expired in the money?

Now, I know what you're thinking. If it's in the money, isn't it good that your broker automatically exercise the options for you on expiration date? Well, yes and no. If you somehow managed to miss ...
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Is american call option exercise taxable event?

Since best to my knowledge the premium paid for the call option has to be added to the strike price to calculate the post exercise stock's cost basis, I assume that the answer is "No, exercise is ...
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What are the risks involved in buying a synthetic long (long call short put) and letting it expire compared to buying the underlying?

As an EU resident, I am not allowed to purchase US-based ETFs. However, I am allowed to trade in options on such ETFs and exercise them. One way of obtaining the stocks I would want to purchase is by ...
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Hedging warrants & cashless exercise

For a given SPAC where the strike on the warrants is 11.50 and each warrant translates to 1 common share, if the company opts for cashless exercise and announces it will deliver 0.37 shares for each ...
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Does options exercise increase a stock's trading volume?

When I buy or sell a stock, the transaction will increase the stock's trading volume. Instead, suppose I buy an option and decide to exercise it immediately (for whatever reason). When I exercise a ...
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When exactly (time) is the 'automatic exercising' of an option triggered?

I understand that - for many brokers - an option that runs out is automatically exercised when it is 'in the money' on the end of its last day. My question is at what exact time is the decision made? (...
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If I have a fixed amount to invest, should I exercise and hold NSOs or ISOs of my company?

I am trying to play some scenarios to compare opportunity costs and hopefully decide on which route, to maximize my gains (after all taxations). I formulated a spreadsheet to help me calculate a few ...
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confused about option expiration date

Many websites said option expires on the third Friday of the month, only once per month. However, this is NOT true for the data I saw for Tesla, from Yahoo finance. From https://finance.yahoo.com/...
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Options Help - Partial allocation of shares?

I'm still learning options trading and got into it recently on Robinhood - but I have a few quick questions. I have 2 contracts for ACB $12.5 Put 9/4. When I go through the steps to exercise it, I ...
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Can any European-style options be exercised before expiration?

I found a page that says the following about European-style options (in the context of weekly and end-of-month options for S&P 500 futures): European-style options can be exercised only on the ...
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Does option "automatic exercise" take commission into consideration?

Automatic exercise is a procedure implemented to protect an option holder where the Option Clearing Corporation (OCC) will automatically exercise an "in the money" option for the holder, ...
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How long does it take to exercise an option?

If I have a call option and exercise it today will I be able to receive the shares immediately to sell them?
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How do exercise oracles work in exchange-traded options?

I understand that this is basically an automated way to exercise an option for a customer as close to expiration time as possible, but I'm curious about how the system operates precisely. Does the ...
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Basic Option Trading question

I have a question, let say if I buy put options from the brokerage and sell the put options when the stock price is below my strike price. Now in this scenario, do I straight away earn the profit or ...
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If I sell an out of the money put option for 20$, and the stock goes to 5$ below the strike price, how likely is it to Be exercised?

If ACME is at 100 and I sell a 90$ put option for 10$, how likely is it that the option will be exercised if the price is less than the strike price but above (strike - cost)? 85$ For instance? If he ...
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Why do people exercise call options at a loss?

I sold some call options for $2.55 premium at strike price of $130. At expiration, the market price was $130.55. I thought the option was not deep in the money and at a loss of $2, hence I didn't ...
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Is it necessary to have 100 x strike price in cash or margin before entering a naked call credit spread?

Context I have no background in Finance but I have many years experience in investing in equities for my personal portfolio so I have a basic understanding I have never traded options I'm keen to ...
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Exercising Options question. Please check my math

I'm spending some time learning options and I have a scenario question. I'm attempting to have this make sense in my head but this just doesn't seem right or maybe I'm missing something. I see this ...
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I sold call options that expired ITM. Why were they not exercised?

I sold two covered call positions that expired Aug 9. Both expired ITM. The 1st one's strike price was $3.00. At expiration, the stock was $3.13 so 13 cents ITM (6 contracts). The 2nd one's strike ...
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Exercising options is not instantaneous

As I understand it, exercising an option does not happen immediately. You send in the instructions to exercise and it gets done at market close for that day. What if, in between the moment you send in ...
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ISO exercise limit before triggering AMT

With recent 2018 changes to AMT, I wanted to understand how much ISO options can I exercise without making a material difference in AMT Scenario Current income 200k Claiming standard deduction for ...
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What tax forms should I expect if I exercise and sell options from a company where I am no longer employed?

This article suggests that if I were to exercise options that I was granted as part of an ISO grant and then sell them in the same year, the bargain element would be recorded in my W-2 form. What ...
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What happens to long otm oex puts if you exercise them?

Since OEX index options are cash settled and are American style, what would happen if you decided to exercise an out of the money put? Would you end up paying the difference between the strike and ...
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If an in-the-money put option is not exercised by 4 p.m. ET on the expiration date, does it become worthless?

If an in-the-money put option is not exercised by 4 p.m. ET on the expiration date, can the shares be assigned to the seller of the put option, or does it expire worthless?
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If my ISOs are converted to NSOs, do I still have 90 days to exercise my vested options as ISOs?

Let's say I have a bunch of incentive stock options (ISOs) in a company that have vested but I have not exercised yet. If I were to leave the company, I have 90 days to exercise them with ISO tax ...
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I sold my earned incentive stock options back to my employer - how is the money taxed?

I recently sold my vested incentive stock-options back to my employer (i.e. so rather than having to spend $20,000 of my own money to exercise my options and make very little paper gain initially, I ...
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Confusion about options: can one exercise at any time?

I am at the beginning of learning about options. I am reading a book on the subject. I am in a chapter about selling covered calls. The book says: Defensive covered call writers may prefer the ...
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Stock options and cash settlement

Lets assume I buy one long call option on AAPL and as the expiry day gets closer the option is in the money. If I decide to exercise that option will there be a cash settlement or a delivery of the ...