If an option purchased by a Fund
expires unexercised, a Fund realizes a loss equal to the premium paid.
If the underlying stock is below $ 33 a share (the strike price) at all times before expiration, the option
expires unexercised and you keep the stock and the premium.
The rule applies if it appears, at the time you sell the put option, that there is no substantial likelihood it will
expire unexercised.
Your only sensible choice is to let the options
expire unexercised.
Not exact matches
Stock below the break - even point If ZYX is trading at 34 at expiration, the
unexercised LEAPS ® calls would generally
expire worthless and the unassigned covered call writer would have a theoretical loss of $ 1,125 (a present theoretical loss of $ 2,750 on the stock position less the $ 1,625 premium received).
Stock above the break - even point If ZYX is trading at 48 at expiration, the
unexercised put would generally
expire worthless, representing a loss of the option premium or $ 350 per contract.