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Strategies & Market Trends : Three Amigos Stock Thread
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To: Sal D who wrote (1568)3/8/1998 11:06:00 PM
From: Sergio H  Read Replies (1) of 29382
 
<Lets assume I have 25 contracts on an April 22.5 call and that I paid 2 1/8 for each contract. On April 15 two days before expiration the price of the stock is 26 1/8 and the price for the April 22.5 call is now 3 5/8.

OK now I dont want to convert them into shares I want to sell my 25 contracts for the 3 5/8 each. Can I do this, and how would I do this, and who is buying them?>

Joe, you can do close your position by selling the options. They have inherent value of 3 5/8. If you would convert them into shares and then sell the shares, you would end up with the same amount of money. How you do it is simple. You just put in the order. Who is buying them? I can't answer that. Most likely it is a seller of similar options. This works by arbirtrary assignment, but you don't need to know this stuff unless you are writing (selling calls). I hope that this is easy to understand. You have a grasp of all of the difficult areas to understand about option trading. The mechanics are the easiest part.

Sergio
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