Sell the call if you can't afford to exercise?

Quote from newwurldmn:

Just because your option is out of the money doesn't mean you won't get exercised. People exercise options all the time if they have mismatched deltas.
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What does mismatched deltas mean?
 
Quote from Eliot Hosewater:

I was paper trading options on Emini S&P500 futures on Friday. I sold a 1360/1360 straddle and with about two minutes to go the short put was in the money by about two points IIRC, so I bought them back. Just then the futures did a moonshot and the short calls ended up in the money. I think it closed at 1363+. Lucky thing it was only paper. Still waiting to see if I will be short 10 /ES contracts at 1360 tomorrow.
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I guess I know why the spike at the close on Friday. You don't suppose word of OBL being killed was leaked to anyone, do you?

ETA: Now I am reading that it happened Sunday, I thought I had seen where it was a few days ago.
 
Quote from stock777:

What broker will let you call at 5pm on Fri and exercise?
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Banks and floor traders can do it. And when their traders choose to abandon their options, it affects retail guys. If you are long then be sure on what your brokers policy is. If it's unclear then cut the position.
 
Quote from Eliot Hosewater:

I guess I know why the spike at the close on Friday. You don't suppose word of OBL being killed was leaked to anyone, do you?

ETA: Now I am reading that it happened Sunday, I thought I had seen where it was a few days ago.
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yeah, there was misinformation floating.
 
Quote from spindr0:

What does mismatched deltas mean?
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Banks, market makers, floor traders generally try to stay delta flat. If on expiry they find themselves long or short delta they might sub optimally exercise options to reduce that exposure going into Monday.

As a short options holder you run this risk even if your option is 10-15 cents out of the money on expiry day.
 
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