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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: DiB who wrote (2796)10/19/2001 7:03:08 PM
From: Uncle Frank  Read Replies (1) of 5205
 
>> Will it automatically be exercised, so 100 shares will be bought with "available cash to purchase securities"?

If you do not instruct your broker to exercise the itm calls, the options clearing house will handle the transaction for you. They will withdraw the shares from the writer's account, and credit him with the same amount of cash as if he had sold them at the strike price. Then they will sell the shares, and credit your account with the difference between the closing market price and the strike price. At least that's the way it works with Fidelity.

Better check with your own broker.

duf
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