New answers tagged option-exercise
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There are two possibilities:
Settlement of the stock hasn't shown up in your account and will do so by Monday morning
You are the most incredibly lucky guy in the option writing world (not likely)
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To answer the question literally, although some other answers have touched on this. If you want to close out your position immediately to lock in profit from the option.
Exercise the option, this will not happen immediately but you will receive the stock either the next day or the day after depending on the market.
As you exercise the option immediately ...
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I think the meaning of the question is: You want to exercise a call and then immediately sell the stock so that you have no remaining exposure to it. (Normally, selling the call itself would be a better way to accomplish this, but let's say the call bid/ask is wide.) You are concerned that you cannot sell the stock immediately because the exercise is not ...
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It doesn't really matter when your option is exercised. You bought a stock for price K - what the stock it worth at the time of exercise doesn't matter.
Suppose you have a call option with a strike of 100. Right now the stock is at 110 so you decide to exercise the option, which happens immediately. 10 minutes later, the stock drops to 90. You paid 100 for ...
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You have three choices with a long option:
sell to close
exercise to acquire the underlying (long or short)
let it expire
When you exercise the contract, the transaction is locked in and your profitability depends on whether your position has appreciated (gain not price). The terms of the contract are fulfilled at the strike price.
Exercise notices ...
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Are there straightforward ways to lock in the profit from an option's exercise?
Yes, by selling the option at a profit without exercising it.
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