O'Reilly logo

Understanding Options 2E, 2nd Edition by Michael Sincere

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

14

Exercise: Your Right to Buy

The good news about exercise is that once you understand the rules and procedures, it is not a mystery. In fact, it is very straightforward. In this chapter, I do my best to help you understand exercise and what actions you can take before the expiration date.

What It Means to Exercise

When you sold covered calls, the stock was called away from you when the call buyer exercised the option. As the call seller, if the stock was called away, you had only one obligation—to deliver the stock. Now that you have traded places and are the call owner, you are the one who gets to do the exercising.

To review, the call buyer (which is now you) has the right to exercise the call option. When the buyer exercises a call option, ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required