Call option - What happens if ...?

[darrenmo]

What happens if a stock is trading at $25.76 and I choose to sell a call option for $25.00 (in the money).

Then I look at the Put options and buy the Put for $25.00 (same amount as the call).

Do I have my shares called away immediately and also have them bought back at the same time? Am very new to this!

 

[Rhody Trader]

If you're trading European style options they can only be exercised at expiration. If you're trading US style it could happen at any time, but so long as their is premium value to the option above intrinsic value the chances of the option holder exercising is extremely slim as it makes very little sense to not just sell the option.

 

[Petrescu]

Note you can't sell it "for" 25. You sell it got pennies or a couple bucks, it being the right of the counterparty to buy shares at 25 for a few months