Saturday, December 12, 2009

RE: [TheOptionClub.com] Re: Calendar question?

 

Or on most trading platforms you can (and IMHO) put in a single order to close both the long and short options of the calendar as a single trade at a net price.  Depending on what may happen after the NY close on expiration  Friday, after hours news could cause someone to exercise which, if you decided to let the shorts expire (technically leaving you short until Saturday, when the options REALLY expire) and closed the longs at 3:59PM, could cost you big time possibly if the news that caused your shorts to be exercised forces you to cover on Monday at a price that is unfavorable to you. On expiration Friday, you can be hurt by afterhours news that a trader who is long  the options  thinks could push the stock enough to make it worth his while to exercise.   A trader, depending on the brokerage house, has until at least 430PM Friday to tell his broker to exercise. You won’t find out until Monday that your shorts have come back to bite you if that happens.

 

Ken

 

From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On Behalf Of Jack
Sent: Saturday, December 12, 2009 6:25 PM
To: OptionClub@yahoogroups.com
Subject: RE: [TheOptionClub.com] Re: Calendar question?

 

 

Actually, you can sell you longs right after (or simultaneously) with covering your shorts.  If you cover your shorts for $.05 or less, TOS will not charge you a commission. J

 

From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On Behalf Of jouless360
Sent: Friday, December 11, 2009 8:08 PM
To: OptionClub@yahoogroups.com
Subject: [TheOptionClub.com] Re: Calendar question?

 

 



Chris:

So ...I close the longs at 3:55 pm on expiration day?

Joules

--- In OptionClub@yahoogroups.com, "Chris" <chris@...> wrote:
>
> Joules,
>
> You cannot close your long contracts before Monday without leaving
> yourself naked on the short contracts. So, what you're looking at doing
> is holding the longs over the weekend. That entails some risk since you
> don't know how the market will open on Monday.
>
> Christopher Smith
> TheOptionClub.com
>
>
>
> --- In OptionClub@yahoogroups.com, "jouless360" <jouless360@> wrote:
> >
> > Option Club:
> >
> > I am somewhat of a rookie in options and was looking for some
> guidance. I am in some DEC09/JAN10 Calendars on the majors and am in
> dead center of my risk analysis curve. Therefore, I am considering going
> to expiration on them...since I have quite a bit of room and I would
> like to max my profit. I put up $4000 and am looking at about $800 by
> next friday.
> >
> > Question: If I let the Dec shorts on my Calendars expire on the last
> Friday....do I have to close the Jan longs just before expiration on
> that day....or wait until the monday after expiration?
> >
> > Thanks for your answers in advance!
> >
> > Joules360
> >
>

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