Question in the region of exercising a put choice (borrowed shares)?
Let's say aloud you bought a put odds and resolve to exercise it at some point. Since you are in proposition selling shares of stocks you borrowed (from the broker I assume?) is in that a fortune that those shares will not be available to be sold when you turn to exercise it? Or will your put other be executed?
Answers:
When you exercise a put, you enjoy to deliver shares to the buyer. There are three ways that you could do this. You could deliver shares that you already own, you could buy shares within the bazaar to deliver or you could borrow the shares from the broker and deliver it subsequently.
The second and third option are somewhat expensive to do -- because of extrta transaction costs -- so you don't see relations doing any of those things severely regularly. Instead, most associates near in-the-money put option get rid of the contracts and don't deliver.
First, the put chance that you excised must be in-the-money (i.e. the remedy strike price is superior than the stock price). Secondly, you will enjoy stocks that you own (i.e. it will not be borrowed) and want to deal in. if you don't enjoy stocks, it seem to some extent meaningless to exercise as you can sold the put odds for profit.
Since you obligation to own the stock surrounded by the first place, it will other be executed.
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Answers:
When you exercise a put, you enjoy to deliver shares to the buyer. There are three ways that you could do this. You could deliver shares that you already own, you could buy shares within the bazaar to deliver or you could borrow the shares from the broker and deliver it subsequently.
The second and third option are somewhat expensive to do -- because of extrta transaction costs -- so you don't see relations doing any of those things severely regularly. Instead, most associates near in-the-money put option get rid of the contracts and don't deliver.
First, the put chance that you excised must be in-the-money (i.e. the remedy strike price is superior than the stock price). Secondly, you will enjoy stocks that you own (i.e. it will not be borrowed) and want to deal in. if you don't enjoy stocks, it seem to some extent meaningless to exercise as you can sold the put odds for profit.
Since you obligation to own the stock surrounded by the first place, it will other be executed.