Ummm...this question is a little confusing to me. What is the underlying play? Buy calls, sell puts, buy puts, what?
If you buy calls and they become deep in the money, and you want to exercise them (for instance I had JDSU March 55s and on Thursday I called to inform Fidelity to exercise them) you either sell them for a profit before the date of expiration, exercise them and keep them, or if you do nothing, the brokerage will exercise them and then sell the shares.
If you sell puts at a certain strike price, and the stock closes above that price, you keep the premium and the puts expire worthless. If the stock closes below that price, and you didn't repair your position, you must buy the stock at the price you set (For instance, per my previous post about AFFX, if I did nothing, I'd have to buy the stock for 260 a share in April)
Does that make sense?
I'd read LEAPS too as recommended in our header |
