Quote:
Originally Posted by Cappy
Not always, though. Especially if a stock is promising.
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Sure, some investors won't sell. But many will. It is net selling pressure, not net buying pressure.
You buy a $9 option at $1. It costs you $100. On expiry day, the stock is at $15. You can pony up $900 to keep the stock, or, you can just sell and take your $700 profit without tying up any more capital.
If you still like the stock, you buy more options (which requires less capital)