Hopefully someone can answer. Say I have a $7 call for XYZ expiring this week 1/20.
Hypothetically, if XYZ is at $25 on 1/20 and I sell the call to take the cash, where does that cash come from? I'm not exercising the call, just selling it. It would be worth somewhere around $2k. Who pays me that money? Market makers?
The call writer (seller)? Or is it the next person who wants that $7 call? Also if it's the latter, what happens if there's no buyer and I can't/ won't exercise? Expires worthless? Sorry for all the questions but I really want to know and can't find an answer anywhere. Appreciate any responses.
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