New answers tagged option-strategies
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According to the OCC, about 7% of contracts are exercised.
In general, it makes no sense for someone to exercise an option that still has time premium remaining it it because doing so throws away that time premium.
However, there are several reasons for early exercise. If an option trades for less than parity (the bid is less than the intrinsic value), it ...
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Neither - If the option is a European-style option, you'd get assigned if the shares are below the strike on the date of option expiry. If the option is an American-style option (options on individual stocks are European, not American), you could get assigned at any time before expiry, but it's very rare - typically it's better for the option holder to sell ...
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First off, a correction. If you buy 100 calls, at a later date you don't purchase or sell 'the call'.
Next, there's the issue of your historical volatility of .39 versus the reality that your call's implied volatility is .311 . Therefore, this is a hypothetical problem that ASSUMES that implied volatility will revert to historical volatility. If the ...
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