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Googling "delta probability expiration" will offer lots of references on the web that discuss delta as a proxy for the probability of expiring in-the-money. Delta is an approximation of the likelihood that the option will expire ITM. Since delta is affected by the various pricing variables, it will vary during the life of the option. Dramatic change in ...


3

When assignment occurs, you are notified that you are short the stock as of Tuesday morning. Buying the stock to cover on Tuesday will not result in a borrow fee. Of greater concern is the opening price of the stock on Tuesday. If you are short the stock and it opens higher, you're not a happy camper. You're probably already not a happy camper ...


1

Pending dividends affect time premium (puts increase, calls decrease). If an ITM call is near expiration and the dividend is large, the call may have no time premium whatsoever. It may even trade below intrinsic value. If you are short an ITM call with a pending dividend, you are likely to be assigned early if there is no time premium remaining, more so ...


1

Owning 100 shares and selling a covered call to fund the purchase of a put is called a long stock collar. If the strikes are different, it is equivalent to a vertical spread. If they are of the same series, it's a conversion. The only way that you could exercise your long put to sell the stock AFTER the short call has expired would be if the put ...


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