Hello, thanks for reading, I have a few question and my google search has only lead to confusion.
1. If you let a stock option that is in the money exercise, do you need to have extra money sitting in your account during expiration day to be able to purchase the stock?
2. If using td ameritrade platform and you buy "+50" quanity in options, is that 50 contracts (aka shares) OR 50x100 = 5000 shares?
3. If you exercise an option, what happens to the money that you used to purchase the option?
4. How do I know the exact amount needed for a smooth option "exercise" on expiration?
5. I know you can close out an option before expiration to lock profits if your are in the money, but can you cut your losses before expiration so you don't lose all premium paid?
Thanks.
1. If you let a stock option that is in the money exercise, do you need to have extra money sitting in your account during expiration day to be able to purchase the stock?
2. If using td ameritrade platform and you buy "+50" quanity in options, is that 50 contracts (aka shares) OR 50x100 = 5000 shares?
3. If you exercise an option, what happens to the money that you used to purchase the option?
4. How do I know the exact amount needed for a smooth option "exercise" on expiration?
5. I know you can close out an option before expiration to lock profits if your are in the money, but can you cut your losses before expiration so you don't lose all premium paid?
Thanks.
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