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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 (705)	2/17/1998 1:05:00 AM
From: Madpinto	Read Replies (1) \| Respond to of 2241

It does not specifically, clearly state the words "exercise & liquidate", it does say that the option BUYER cannot lose more than the premium paid for the option. Being short stock opens one up to theoretically unlimited losses. Hi Doug, Options buyers have limited losses as long as they own the option. Once the option gets exercised, all bets are off. Call exercisers get long stock and put exercisers get short stock. The exchanges added the automatic exercise because people do forget about positions (as you stated). It is up to the exerciser to liquidate the position except in the case of index options.