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Non-Tech : Just For Feet (FEET)
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To: Scott Finchler who wrote (181)5/6/1997 12:22:00 AM
From: Walter High   of 750
 
Scott:

No individual customer actually bought your calls. When you put them up for sale, they were bought by one of the market makers for FEET. The market maker will buy them even if there are no corresponding purchase orders. He serves as a middleman, buying and selling the calls and puts, and moving the price to try to keep them in balance. Consequently, there is no specific person who owns your calls.

If someone wants to exercise a call, they notify their broker who buys the stock through the market maker. The central clearinghouse for options then randomly assigns the call to one of the brokers who has customers who have sold the call. The broker then chooses which of his customers will get called out. As a result of this process, you don't have to worry about a specific person holding your calls and deciding to cash them in. You may get called out of only a portion of the calls you sold.

Hope this helps understand the process.

Walter High
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