Hello, I am new to the option market. I really need some experienced trader to help me solve questions about call option.
- If the call option is ITM or even DITM, is it still possible to sell to close on expiry? By expiry I really mean “the last trading hour or minute.” Is there really any rational real person to buy a ITM or DITM calls at last minute? If it's too hard or almost unlikely, does that mean I have to exercise my call to take my profit?
- The 1st one comes to the supplementary question: In trading options, do I trade with a real person/company or a market maker agency? I mean if I trade to a real person, I hardly believe any rational person would trade calls on expiry. BUT if it's a market agency which trade calls automatically when I want to sell it, it would be no problem even if I sell to close by last minute.
- If I am very unlikely to trade ITM calls on last minute before expiration, and I don't have enough cash to exercise, what can I do? Say exercising calls needs 10k dollars, and I only have 1k dollars on hand. Can I use 1k to exercise some calls and sell them at once, then repeat this process multiple times to finally cash out all my profit? Will the system automatically process these steps for me to cash out since it knows I earn a profit?
- The last and ultimate one: You don't have cash to exercise ITM calls. Say if you got some info and predict the price will rocket exactly on 10/7 Friday, do you buy 10/7 calls or 10/14 calls to maximize your profit if the only way to cash out is selling to close? (Or 10/6 Thursday? Cuz last trading day is before expiry day? anyway, What I mean is the last day that I can sell my calls, not exercise it.) Because 10/7 calls are much cheaper than 10/14 if your prediction is correct, the only thing you worry about is if it's likely to sell.
Some pro traders please solve my confusion. Thank you all. I really appreciate it.
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