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Showing content with the highest reputation on 04/13/17 in Posts

What happens to your premium if your option was exercised?

@stan255- when you sell an option, you collect the premium up front, so you get to keep all of it. For example, if you sell a 20 strike put for stock XYZ for 0.50 and you get exercised then you are really buying the stock for 19.50. Practically speaking, you are highly unlikely to get exercised unless your strike is so far in the money that the remaining time premium left in the option is near zero.
- April 13, 2017
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