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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Petz who wrote (200404)	6/4/2006 8:08:28 PM
From: neolib	Respond to of 275872

Me: Why pay the time premium of selling a call option as the means of exiting the position? You: The last sentence I don't understand. Selling any time premium is good, not bad. If there is any. I have often seen the "bid" on calls below intrinsic value when in-the-money. In that case if you tell your broker you are exercising, you should be free to sell the shares in either the regular or after-hours session. My mistake on wording that, what I meant was what you observed, that the bid for in-the-money calls with one day left can be below the current stock price. However, the other part of the question revolved around the issue that you might not be able to exercise, i.e. purchase the shares, since the value of the shares might exceed your available funds. So you can only exercise by selling the same call, or by having the broker exercise & sell immediately? If you get assigned on Friday, settlement is not until Monday, and the stock might open significantly down on Monday, as it did for AMD this last month. Shorting on Friday prior to the close, then getting assigned on Monday and covering seems like it might be more useful, but if, as niceguy stated, you can't short the shares due to margin limits, what else can you do?