Viewing a single comment thread. View all comments

CompetitionDouble420 t1_jeaszpg wrote

u/silverwind18 Really dumb question: in order to exercise those puts, do you have to own the shares already?

I understand with call options, you have to have the capital to exercise your calls at your specified strike. So, is the opposite true for puts? Do you have to own the shares in order to exercise your puts at your strike?

1

silverwind18 OP t1_jeb07mf wrote

Yes, in order to exercise a put option, you must have the underlying shares available to sell at the strike price. This means that if you don't already own the shares, you would need to purchase them at the market price in order to exercise the put option.

Note that most options traders close out their positions before expiration rather than exercising them.

3