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Strategies & Market Trends : Tech Stock Options
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To: Taby who wrote (58567)1/21/2000 10:50:00 PM
From: cthruu   of 58727
 
Your option gets exercised and you buy the stock for the strike price.

For example, If you are holding a $100 call (one contract)and your option is $10 in the money, that means that the stock closed at $110. You get a phone call from your broker on Monday that you bought 100 shares at $100 each for a total of $10,000 plus commissions. Assuming the stock is marginable, you need $5,000 in the account. If you do not have enough money in the account, you get a margin call.

Of course, you can sell the stock on Monday morning and if your broker cooperates, you can keep the profit provided the stock moves up. You will be paying commission for stock trade instead of option trade.

Regards:

GP
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