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What happens if my call option expires in the money?

Elmer Yost ∙

Lvl 10

∙ 1mo ago

Updated: 2/16/2025

If your call option expires in the money, you have the right to buy the underlying asset at the strike price. This means you can purchase the asset at a lower price than its current market value, potentially resulting in a profit.

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∙ 1mo ago

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Q: What happens if my call option expires in the money?

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What happens if a call option expires in the money?

If a call option expires in the money, the option holder can buy the underlying asset at the strike price, which is lower than the current market price. This allows the holder to make a profit by selling the asset at the higher market price.

What happens if I don't sell my call option before it expires?

If you don't sell your call option before it expires, you may lose the opportunity to profit from it. The option will expire worthless, and you will lose the premium you paid for it.

What happens when a call expires?

When a call expires, it means that the time limit for the call has been reached and the connection is automatically ended.

How can one make money on call options?

One can make money on call options by purchasing them at a lower price and then selling them at a higher price before the option expires. This allows the investor to profit from the difference in the option's strike price and the market price of the underlying asset.

Can you provide an example of a deep in the money call option?

A deep in the money call option is when the strike price of the option is significantly lower than the current market price of the underlying asset. For example, if a stock is trading at 100 per share, a deep in the money call option might have a strike price of 50.

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Related Questions

What happens if a call option expires in the money?

If a call option expires in the money, the option holder can buy the underlying asset at the strike price, which is lower than the current market price. This allows the holder to make a profit by selling the asset at the higher market price.

What happens if I don't sell my call option before it expires?

If you don't sell your call option before it expires, you may lose the opportunity to profit from it. The option will expire worthless, and you will lose the premium you paid for it.

Buying the call option is risky?

Buying calls isn't very risky. If the option expires out-of-the-money, all you lose is your premium. If it expires enough in-the-money to cover the price of the stock plus the premium on the call, you make money--potentially a LOT of money if the stock price shoots up.

What happens when a call expires?

When a call expires, it means that the time limit for the call has been reached and the connection is automatically ended.

How can one make money on call options?

One can make money on call options by purchasing them at a lower price and then selling them at a higher price before the option expires. This allows the investor to profit from the difference in the option's strike price and the market price of the underlying asset.

What is anyoption dot com?

anyoption™ is a platform enabling users to trade on a wide range of binary options.You can buy a Call option and get 65-71% return if the option expires above the level.And you can buy a Put option and get 65-71% return if the option expires below the level.Even if your option expires out-of-the-money, you will receive a 15% refund on your investment, credited directly to your account.There are over 50 assets to choose from and a range of expiry times. It's your trade, so design it to suit your knowledge and your needs.

Can you provide an example of a deep in the money call option?

A deep in the money call option is when the strike price of the option is significantly lower than the current market price of the underlying asset. For example, if a stock is trading at 100 per share, a deep in the money call option might have a strike price of 50.

What are the factors that determine the highest covered call premiums available in the market?

The factors that determine the highest covered call premiums in the market are the volatility of the underlying stock, the time until the option expires, the strike price of the option, and the current interest rates.

When you sell a call option who gets the dividend?

Dividends don't play into call options. If you sell a covered call and it expires worthless, you'll receive any dividends from the stock because you still own the stock. If it's exercised, the new owner receives them because the stock is hers now. The money that changes hands when you sell a call is the "premium," and the person who sells the call gets that.

What is riskier selling a covered call option or buying a call option?

It depends on what you consider risk. A lot of people think selling a stock that cost $20 for $25 when it's trading at $27 or $28 is a risk. If you're one of them, selling the call is definitely riskier. To me, selling stock that cost you $20 for $25 means you made five bucks on the deal plus whatever the premium was, so it's all good. There are two forms of risk in buying the call. The most obvious is if the call expires out-of-the-money. If so you lose your premium. The other is this: you have to pay for calls. If you bought an Acme call with a strike price of $25 and paid a $1 premium, you need to exercise at no less than $26 to avoid losing money. If the call expires with the stock at $25.50, you lose 50 cents per share. So...if you absolutely HAVE to make as much money as you possibly can, selling the call is riskier. If not, the buyer is more at risk.

What it means Uncovered Option Positions that are In The Money ITM?

In the money means the selling price of the item is either above (if you're working with a call) or below (if you're working with a put) the strike price in the contract. An option that is in the money can be exercised. An uncovered, or naked, option is one where the person who will have to come up with the item if the option is exercised doesn't own it. Naked calls have to be hedged with other calls: you sell a naked call at, say, $45 then buy a call yourself at $45. Naked puts have very low risk--all you're really risking is your premium. A put exercises if the strike price is above the current spot price, so if the put goes in the money at least enough to cover the premium, you exercise, collect the money from the transaction then use that money to buy the stock. If it expires worthless, you're just out your premium.

What is a covered call in the money and how does it work in options trading?

A covered call in the money is an options trading strategy where an investor sells a call option on a stock they already own. The call option is considered "in the money" when the stock price is higher than the option's strike price. By selling the call option, the investor collects a premium, but they also agree to sell their stock at the strike price if the option is exercised. This strategy can generate income for the investor while potentially limiting their upside potential if the stock price rises above the strike price.

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