Monday, July 18, 2011

What happens with Call Option?

Yes you can write a call option and collect a premium for it. If at the expiration date the price of the stock is above the strike price, then you must sell to the buyer of your option your stock at the strike price. If it does not reach the strike price, then the stock continues to be yours for as long as you want. BTW, 80% of all options expire worthless at the expiration date (they are below the strike price), so the odds are in your favor.

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