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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: ---------- who wrote (696)	2/16/1998 1:56:00 AM
From: Cents	Read Replies (3) \| Respond to of 2241

Doug,I meant to say sell my puts. I didn't quite understand what you meant by <IF AOL ends up under $110, then you will be "exercised & liquidated." In other words, you will, after commissions, receive whatever amount the option was in the money. > But then you go onto say: <If you have puts, then you need a Friday close below $106.50 to get out even. > And what if it ends up at $109? Can you understand my confusion? Is "in the money" then considered at $110 or under $106.50? Would it be better for me to close out my position (selling my puts, not knowing yet what value is left and paying the commission)before it's under 110 or let it be exercised (even though I don't want the stock)? Anna

To: ---------- who wrote (696)	2/16/1998 9:42:00 AM
From: broken_cookie	Read Replies (1) \| Respond to of 2241

Doug, <<<It doesn't matter, at least conceptually, regarding your question. If you own puts and IF you do nothing and IF AOL ends up under $110, then you will be "exercised & liquidated." In other words, you will, after commissions, receive whatever amount the option was in the money. >>> If the put is in the money, it will be exercised and the owner of that put will find themselves short AOL at $110. If there is insufficient margin, the person will be receiving a margin call. Only index options are automatically settled in their cash equivalents.