Say I enter a call debit spread for stock XYZ.
Buy $120call and
sell $140 call.
say the stock price is currently trading at $150, I get assigned to sell at $140 a share. Now I have a $120 call I bought not exercised.
say for some reason I don’t exercise the $120 call I bought, and still have weeks to expiration. All of a sudden, the stock tanks to $100 a share. Now I am not able to exercise my $120call I bought. How would it be possible for me to have sold 100 shares at 140$ (which I don’t have 100 shares of)?
Leave a Reply