Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (1324)	3/2/1998 8:04:00 PM
From: Sal D	Read Replies (1) \| Respond to of 29382

Sergio I think Im ready for some real life lessons with some real money, those lessons are the easiest to remember. I do have one more question though. This is a hypothetical situation using easy to use numbers. Lets suppose I decide to buy 50 contracts for a 25.00 call each one costing 1.00 So the 50 contracts cost me 5,000.00 and give me the option to buy 5,000 shares at 25.00 before expiration. The stock gos to 30.00 and I exersize my option I buy the 5,000 shares for 25.00 = 125,000.00 I sell them for 30.00 = 150,000.00 25,000.00 - 5,000.00(premium) = 20,000.00 (profit) My question is the day I exersize the option and buy and sell all in the same motion (if that is in fact what I am doing, remember I never traded options and do not know how the transaction actualy works). Do I have to have the 125,000.00 in my account to cover the purchase even though Im selling it immediatly for more. BTW thanks for the look into TRCD. I had a buy order in today at 1 3/32 thought it would dip but it never did up another 17% today. Something could be up? Joe