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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: DiB who wrote (2796)	10/19/2001 6:09:13 PM
From: Andrew N. Cothran	Respond to of 5205

My understanding, and it could be faulty, is that to exercise an option, you must instruct your broker to that effect. If you don't instruct him to exercise, then the option is not exercised. As I said, I may be wrong.

To: DiB who wrote (2796)	10/19/2001 7:03:08 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

>> Will it automatically be exercised, so 100 shares will be bought with "available cash to purchase securities"? If you do not instruct your broker to exercise the itm calls, the options clearing house will handle the transaction for you. They will withdraw the shares from the writer's account, and credit him with the same amount of cash as if he had sold them at the strike price. Then they will sell the shares, and credit your account with the difference between the closing market price and the strike price. At least that's the way it works with Fidelity. Better check with your own broker. duf