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Strategies & Market Trends : Options
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To: Poet who wrote (476)1/2/2000 1:42:00 AM
From: taxman  Read Replies (2) of 8096
 
in exercising calls i believe the margin rules are the same as buying shares at the strike price. so if you want to exercise 10 call contracts with 100 strike your cost is $100,000, requiring cash of $50,000 in your account.

i believe this is still the case even though the underlying has risen to 200 per share and your strike is 100.

at the beginning of each month i review my account to determine which of the in the money options i wish to sell and which i wish to exercise. i will also check with my broker in advance to make sure i have the equity necessary for exercise.

once i decide i want to exercise i affirmatively do it with a phone call (dreyfus does provide for online exercise). i don't count on in the money options being exercised automatically.

regards
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