Purchases and sales of options cannot be canceled once they are transacted. You cannot simply stop the trade once you’ve bought or sold an option, you are bound by contract to meet obligations at expiration. Option cancelling works differently than normal. The consequences of your options positions are canceled by acquiring a perfectly offsetting position, neutralizing your exposure.
If you purchased a call or a put at a specific exercise date and price, write a call or put which has the same exercise price and date on the same underlying. If you wrote a call or a put at a specific exercise date and price, purchase a call or put which has the same exercise price and date on the same asset. This strategy is slightly imperfect, since you may not pay (or receive) the same premium for the opposing position as you did on your initial position. You can suffer a premium loss or a profit from premium imbalances. This strategy will generally cancel out your position.
This is an imperfect strategy if you’re using options which can be exercised before their expiration, as you may get assigned earlier than expected. If your opposing position is still at or in the money, you can exercise your cancelling position. If the price falls out of the money between your assignment and your attempt to exercise, you will not be able to exercise your option to cancel your exposure.
You may be forced to acquire the asset instead of simply having cash withdrawn from your account with the brokerage. You will need to know if your position exposure can be settled via cash or if owning the underlying asset is absolutely required. If you must transfer the underlying asset you will need to purchase it on the open market, which may be more expensive than anticipated.
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International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
Investment and Finance, Serviced by Amazon
A Concise Guide to Macroeconomics, Second Edition: What Managers, Executives, and Students Need to Know
A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market
Algorithmic Trading: Winning Strategies and Their Rationale
Alternative Investments: CAIA Level I (Wiley Finance)
Alternative Investments: Instruments, Performance, Benchmarks, and Strategies