One way to answer your question is to ask yourself, “Which provides the highest price/lowest cost – exercising the rights of the option contract OR selling the contract back into the marketplace?
If you exercise an option, the settlement will be in three business days, just like if you bought or sold stock on an exchange. So for example if you exercised a call and simultaneously sold the equivalent shares of stock, those transactions would offset each other. Assuming the option is in the money there should be no need to post margin for such a set of offsetting transactions. Of course, you will want to check with your brokerage firm to ensure that you are both on the same page regarding this practice.
Related Questions
- One way to answer your question is to ask yourself, "Which provides the highest price/lowest cost - exercising the rights of the option contract OR selling the contract back into the marketplace?
- If the lowest price supplier is far away, won shipping costs eat into the cost savings?
- Does The RedX offer the highest quality leads at the lowest cost?
