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I've been exercised a couple of times and essentially you check your statement and you are short shares = # of contracts x 100 if you don't already have the stock to deliver. Don't forget you are also going to get the strike price x 100 deposited into you account as well. So all you have to do is make up the difference if you no longer want to be short the stock/or want the stock back. Frankly, I've lost a little and made a little when the stock was "called" away. Unless you are in a really rocky stock or have an option where the bid/ask price on the stock is large, it's usually not that big a deal. It is pretty scarry the first time it happens, but once it does you figure out exactly how it happens and it is really not such a big deal anymore.

I note the above as I pretty much confine myself to options on index tracking stocks which aren't as volatile.

CHeers Kev
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