Hi, I'm very new to options and just trying to learn as much as I can before actually trying them out. I understand what the options contracts are, how to buy, and the general info, but I'm a bit confused on how you exit them.
So if I bought a call, and say it goes up significantly ITM, I could then sell that call for profit (or exercise it and buy 100 shares at strike) – correct?
Likely I'd just sell the call option, since I don't have the $$ for 100 shares of most stocks yet, and would then have to also do the extra step of selling them for profit.
Okay.
Now if I sell the call option, get my profit, I'm happy.
But what happens if the person I've sold this contract to exercises it and says “hey I want to buy those 100 shares now” (which I do not have).
The majority of stuff I'm seeing only talks about selling covered calls, but I'm not going into this with 100's of shares.
I don't know if you can do (or how to do) uncovered calls? I don't think they're allowed on the particular app I use anyway.
Or does nobody ever exercise the contract, and the person who bought it from me will likely sell it for profit to someone else and at that point it's no longer any of my concern?
If anyone can explain this in layman's terms I would sincerely appreciate it. I'm pretty lost and have been doing lots of digging around youtube and the goog and not really getting a clear answer on this.
TIA
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