In the money put option expiration
Charts, screenshots, company stock symbols and examples contained in this module are for illustrative purposes only. The writer sells the put to collect the premium. By put-call paritya European put can be replaced by buying the appropriate call option and selling an appropriate forward contract. Vijay December 18, at The trade is successful.
This article needs additional citations for verification. Leave a Reply Cancel reply Your email address will not be published. Options trading entails significant risk and is not appropriate for all investors. The put writer's total potential loss is limited to the put's strike price in the money put option expiration the spot and premium already received. The most obvious use of a put is as a type of insurance.
Unsourced material may be challenged and removed. Kel November 11, at 7: You will be obligated to deliver shares of stock or buy stock at the short option strike price, and your broker would use the long option to cover the obligation. From Wikipedia, the free encyclopedia. The put writer believes that the underlying security's price will rise, not fall.
You would be assigned on the In the Money 94 call. Prior to exercise, an option has time value apart from its intrinsic value. Vijay December in the money put option expiration, at The maximum potential profit is equal to the strike price of the put minus the price of the put, because the price of the underlying can fall to zero.