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Keep in mind, there is no warranty that there will be an active market for an options contract, so it truly is possible to end up stuck and unable to close an options position.

The close-it-out class also involves ITM options that could result in an unwanted long or short stock position or maybe the calling absent of a stock you didn't want to part with. And remember to watch the dividend calendar.

Nonetheless it goes beyond the exact price issue. What if an option is ITM as of the market close, but news comes out after the close (but before the exercise decision deadline) that sends the stock price up or down through the strike price? Remember: The owner of the option could submit a DNE request.

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Short selling is really an advanced trading strategy involving potentially unlimited risks and must be done in the margin account. Margin trading increases your level of market risk. For more information, please seek advice from your account agreement as well as Margin Risk Disclosure Statement.

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