What if I buy a put option but I don't have shares in my account? Say I bought a put of share A (strike $10) at $1/share, but I don't have any share of A. On the expiration date, share price falls to $5, how can I exercise my option?
What if I buy a put option but I don't have shares in my account? Say I bought a put of share A (strike $10) at $1/share, but I don't have any share of A. On the expiration date, share price falls to $5, how can I exercise my option?
in this case, your naked put option is in the money ,you just need sell those options and book a nice profit before expiration date. Nothing to do with stock shares unless you really really want exercise options ,then ask broker lend you shares to short which makes no sense at all.Cuz you already make a nice profit. Why bother ??
Just like you bot ABC stock@ $1, sell ABC @$5( maybe more depending what time you sell those)