Do I have to hold options until they expire?

You can buy or sell an option whenever you want for a profit or a loss. In fact, in most cases, you don’t want to hold an option until expiration.

When a call option expires in the money — meaning the stock is trading for more than the option’s strike price — it will automatically be exercised by your broker. That means your broker will buy 100 shares of the stock in your name at the option’s strike price. Theoretically, you can then sell your stock for the intrinsic value that your option had when it expired, less any commissions and exercise fees. But if you sell your option before expiration, you don’t have to worry about that hassle.

For more, check out my options cheat sheet here.


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