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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe
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To: Herschel Rubin who wrote (1036)10/20/2004 12:55:52 AM
From: LLCF   of 1064
 
<Are we to assume that the remaining 8000 contracts representing about 800,000 shares were exercised? I can't imagine that there are that many options players who exercise their in-the-money options as it requires substantially more capital to do so than the amount vested in their options.>

They're probably all professionals short stock against them... so they exercise and they're flat on monday. Look at ANY big equity option... MO, IBM, whatever... they all have tens of thousands OI on expiration... same story.

<Or if some contracts are involved in straddles or bull/bear spreads, they don't need to be exercised, thus explaining the apparent lack of final reconciliation for these outstanding puts & calls on expiration day?>

They're all 100D on expiry day and all hedged out... there is no more 'bull' or 'bear' left to the spread.

DAK
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