Eric W asked in Business & FinanceInvesting · 1 decade ago

Exercising/ Offsetting stock options?

Hi,

I am wondering if I buy a call option on say ZZZ at $80 now and sometimes later before expiry that ZZZ went to $95. Now if I want to exercise my option (buy and then immediatly sell the stocks to capture the gain), do I need the capital to buy the underlying the stock?

Meaning, do I need to have $80000 first to buy the stocks before I sell it?

Thanks

4 Answers

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  • 1 decade ago
    Favorite Answer

    You do need the capital, unless you have a margin account (which is analagous to obtaining a loan from your brokerage company against your other positions).

    The best bet is to simply sell the option, that way you do not need additional capital, and you are not destoying the time value imbedded within the option.

  • Anonymous
    4 years ago

    You're limited to $3000 against income other than capital gains and losses

  • Anonymous
    1 decade ago

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  • Anonymous
    1 decade ago

    no.

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