[TheOptionClub.com] Re: how do I adjust options so they don't get exercised?

 

Paul, as Chris mentioned, the sure-fire way is to close the position. But that being said, when you hold short options and the guy on the other side has the long side, if he exercises early, then he loses his entire premium, so there is no incentive to exercise early--it is a rare event for this economic reason. So if it happens to you 1 out of 100 times, just take your hit and move-on. It is a rare event. Maybe others on this group could give some anecdotal examples of how infrequently early exercise occurs.

Also, only American style options can be exercised early. European style options cannot be exercised until expiration day. Some of the options traded on CBOE are European style. You can go to the OIC website: www.optionseducation.org and they have an entire list of all options and american vs european style. Look for "Directory of Listed Options XLS" in lower-right corner under "Key Links". That is an Excel spreadsheet of ALL option contracts in existence. Look for "Euro" in the name and those are the European style options. For example, the XEO, which is the SP100 Quarterly European style contract. Or talk to your broker who can help you. ThinkOrSwim is the BEST broker out there for options trading, and OC members get special $1.25/contract commission if you ask them for it.

Sorry for some of the terse responses. Some of the other members don't handle elementary questions very tactfully.

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