that's not quite correct. if you sell a $15 call, you are obligated to provide 100 shares of that underlying to the call buyer. the call buyer would pay you $1500 for those 100 shares. How you obtain those 100 shares is not the issue. If you don't already own the shares and your calls are exercised (regardless of the underlying's price), you must buy the shares in the market (at the best price you can get). American style calls that you sell can be exercised even if the underlying price is BELOW the strike price. i agree that this probably makes no sense, but there is nothing to say that it could not happen. So, if the underlying price ($14.98) is LESS than the strike sold ($15), you COULD actually make a profit if you bought the shares at the market ($15.00 - $14.98). You lose money, penny for penny, if your calls are exercised and the price of the underlying is greater than $15.00.
I can't believe that this discussion has gone on this long in this group. We're smarter than that, everyone...
---- Original message ----
Date: Wed, 7 Jul 2010 22:41:13 -0700
From: Paul Wyatt <pbwyatt@msn.com>
Subject: RE: [TheOptionClub.com] one more try
To: <optionclub@yahoogroups.com>
When you sell the $15 call option you have the obligation to sell the stock at $15. If it trades above the strike then you will have to make up the difference.
To: OptionClub@yahoogroups.com
From: paul7313@yahoo.com
Date: Tue, 6 Jul 2010 17:22:24 +0000
Subject: [TheOptionClub.com] one more try
stock trading $20, sell call option @ $15
will I get put the stock if above $15?
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