John,
You should call your broker and ask them what will happen (some handle this differently than others), because you could end up with a mess on your hands. Also, it depends on whether you want to own the stock or not. If you are just using the options for profit, my advice is to close the trade no later than Friday afternoon (after most of the time value is gone from the options) - that's what I would do. As a matter of fact you are not gaining much by holding this any longer and you could close it now(you are probably at 95% or better max profit right now).
Let's look at this logically:
You are long the 30 option strike. Normally you would be assigned 100 shares of stock at 30.
You are short the 31 option strike. Normally you would have to sell 100 shares at 31 to the holder of that option contract. If you want the stock at 30, you need to buy back your short 31.
If your broker charges for all these transactions, it could eat into your profit significantly.
--- In OptionClub@yahoogro
>
> I suspect I'm making this too difficult, but here's my question. I'm long Disney Dec 30 calls and I'm short and equal number of Dec 31 calls. The stock is now at 32.18. As long as DIS remains above 31, is it advisable to not take any action to close this spread and let it go to expiration? I think I will be credited with $1.00 upon expiration without needing to do anything with the spread before Friday. Am I missing something? Thanks to all who take the time to help others make sense of this game!
>
> John
>
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