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Strategies & Market Trends : Tech Stock Options

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To: James Joyce who wrote (58348)2/25/1999 9:55:00 AM
From: Michael Ohlendorf  Read Replies (2) of 58727
 
Thanks James for your detailed explanations. Could you tell me what you mean with this phrase: "If exercised you would have to buy the stock and then deliver it whcih would be a net wash on capital requirement but might cost you the comish to buy and then the comish to sell to the execisor." I initally asked since I wanted to know if I would have to buy the stock and deliver it to the holder in case he exercises the options I sold to him. What if I do not have the cash to buy all the stocks but if I have the cash to pay the real loss which means the difference in the option's price I lost to the holder (assuming the price moved against me in the example).
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