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IDS World Markets Tues 27th February 07


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I would think that whoever gave you that piece of info is mistaken. If you can't exercise it, then it's not an option, is it? What would give it its value?

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Wouldn't be the first time I'm wrong. :rolleyes:

 

The devil may be in the terms. With an option, I understand you can have three choices: expiration, cancellation, and exercise. To your question above, cancellation would provide the value where you capture the difference between current value and price paid.

 

I may be mistaken, but I think exercise only works for calls. For people who have no margins but have options privileges (most IRA accounts with option privileges), exercising the put for a short margin wouldn't be possible.

 

There's plenty of differences between puts and calls. You can't write covered puts, and the dividends on options are deducted from calls, but not puts.

 

Again, I may be wrong. But I just don't think you can exercise puts. You can cancel them for profit or let them expire worthless.

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Unfortunately I was long the DOW via Rydex leveraged funds. I covered half this morning and the rest at the close... I thought we were at trend line support and there was a positive divergence on the MACD on the 30 min... I'm feeling a little ill right now...

 

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