Okay, thrird post here. I will jump right in as usual.
Lets say I bought a option.
dec 15th @135C with the current price floating around $126 a share.
[Sorry if formatting is wrong]
If I wanted to exit that call option [sell to close] and nobody buys..I would be stuck paying 12k for the 100 shares @135 if it expires ITM on the day of, and brokerage auto excercises.
I know that I could exit prior to the expiration date and avoid that, but what if nobody buys. Then things take a last minute turn and brokerage auto excercises. I then would be obligated of buying 100 shares at 135. About $12,000. Of course, this isnt possible as of now. Just the scenario I am using.
If the stock price is moving in my favor toward the strike price, will I be at risk of liquidity issues and have a hard time exiting the call option?
Im trying to confirm liquidity issues regarding [selling to close] on a call option…the basis of this post. For additional information.. the call option I am referring to had a volume of 9,000 with open interest at 11,000
I have read a book I was recommended and gained so much information, but as i get deeper into learning options, it just seems like theres more what ifs, and wrong things that can happen.
I appreciate any replies you all have.
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