ed, in spring of 1998 I had some call options in a stock called RIG (oil driller). I was super-busy with work, and actually let the options go into expiry without doing anything. Actually what happened is I expected them to expire worthless, because the morning of the 3rd Friday on the expiration month, the stock was two points below the strike price. During the day, the stock rose 4 pts. The good folks at Schwab noticed my calls expire, and so purchased the stock at the strike. I did not have even close to enough cash in my account. I had less than 20% of the needed cash, don't remember. So they sold the stock immediately, which gave me two points. They floated me a loan for $18,000, and I profited $800 on the trade.
Remember that the option contract actually doesn't expire until Saturday, so if your broker wants to do you a favor after regular trading ends, a broker can do so.
Just a regular Schwab account is what I had, no special priviliges. |
