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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: Spartex who wrote (21293)3/20/1998 4:23:00 PM
From: Steve Fancy  Read Replies (2) of 42771
 
Quad, not sure I follow the question, but the person who writes a call is obligating himself to sell the stock at the strike price on or before expiration. The actual shares are not physically moved until and unless assigned. As long as the writer is not assigned, he keeps the option premium received and the stock. He keeps the premium either way, but may lose selling the stock at the strike price if the stock rises above it.

The clearing house (OCC) will automatically assign options with 3/4 point or more intrinsic value at expiration. Any option not cashed out with less than 3/4 point value at expiration, just dies I believe, the buyer just put the money in the toilet.

Hope this helps.

sf
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