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Anonymous

29 Dec 2021

Stocks

Selling Put Options

Hi, I would like to ask what happens if the put option that I sold falls below the strike price before the expiry date. Will the put option be exercised by the brokerage? If yes, am I then able to buy back the option to close it? I am using Tiger Broker if it helps.

Discussion (2)

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The put buyer can decide if he wants to exercise~

After exercised then sell covered call option lorh 😂

Tan Choong Hwee

Edited 29 Dec 2021

Investor/Trader at Home

You are not trading against the brokerage, but the other options traders. Therefore It is the put option buyer discretion to exercise the put option. Once exercised, there is no more put option under you, and you would have to pay for the underlying shares assigned to you by the buyer. You can buy back the put option before any buyer exercise it, but you would suffer a loss because the put option premium would have increased beyond the premium you collected when you sold it.

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