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Strategies & Market Trends : Selling Puts: Have Cash Will Travel -- Ignore unavailable to you. Want to Upgrade?

To: rrufff who wrote (951)	1/24/2000 10:42:00 AM
From: taxman	Read Replies (1) \| Respond to of 1235

thanks. i believe that you are correct. i know for sure that the ability to exercise does not expire with the close of trading at 1300 pacific time on friday. now if you own a 100 put and the stock closes at 100 in regular trading, your put is probably worthless. now let's say in the after market the stock is 99 bid, 101 offered, and you sell 100 shares at 99, will this suddenly make your put worth 1 dollar. i don't think so. if you exercise you sell at 100, but it would cost you 101 to cover. as a practical matter, i exercise on friday after the close because my broker is not open on saturday. what is true is that news can come up after the close that would want to make a put holder exercise even though the stock closed at or above the strike price. for example, an earnings warning and you, as the put holder, think the stock will open at, say, 96 on monday. or conversely, being short the put, you could get exercised even though the stock closed on friday in regular trading at or above the strike price due to late breaking news. it's the put holder that has the right to exercise regardless of where the stock trades on friday. regards