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Non-Tech : Any info about Iomega (IOM)?
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To: Rajendra KRISHNAN who wrote (30405)9/19/1997 9:12:00 AM
From: Jon Tara   of 58324
 
Rajendra, again, a call option writer cannot lose money (on the option transaction) if the stock closes below the strike price! In fact, for a naked writer, this is his point of maximum profit. In this case, the option writer retains the entire premium, and the option expires worthless.

A covered writer will of course lose money if the stock closes below SP-premium.

When the option buyer exercises, he does not get EP-SP-2.5. He gets 100 shares of stock. There is no cash involved at the point of exercise.
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