beckham.is.619
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Hi, I was thinking about a hypothetical case on options trading and what will possibly happen?
Consider a case where I purchase a large (in proportion to my account size) call option for a large number of stocks. On the day of expiry, the calls are in profit. However, my account doesn't have sufficient balance to exercise the option, think 10000 of Berkshire Hathaway Shares, or FX options, where the lotsize exceeds the margin/leverage provided by the broker, or something similar etc.
1. Will the broker let the option expire without exercising it?
2. Should I consider selling the option before the date of expiry?
2a. if the size of the number of lots is too large, is it possible to break it up and sell it partially, or should I consider purchasing Put options with the same expiration date?
Consider a case where I purchase a large (in proportion to my account size) call option for a large number of stocks. On the day of expiry, the calls are in profit. However, my account doesn't have sufficient balance to exercise the option, think 10000 of Berkshire Hathaway Shares, or FX options, where the lotsize exceeds the margin/leverage provided by the broker, or something similar etc.
1. Will the broker let the option expire without exercising it?
2. Should I consider selling the option before the date of expiry?
2a. if the size of the number of lots is too large, is it possible to break it up and sell it partially, or should I consider purchasing Put options with the same expiration date?