Message Font: Serif | Sans-Serif
No. of Recommendations: 1

You wrote, If this person sold the puts and the stock continued to fall, at expiration would he automatically be put the stock at the strike price in which he entered the trade or does someone need to initiate this action?

In other words, can the put expire in the money and him not be required to take the stock?

My understanding is that it depends on the policies of the broker holding the account holding the put. As I understand it, most brokers will automatically exercise options at expiration that are more than a certain amount ITM. How much that is varies by broker; but it's usually not much more than the amount required to cover a commission.

But I suppose you could get lucky...

- Joel
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.