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Northern Illinois | if you buy a put and then sell a put in the same contract month at the same strike price you have offset the position so you will not owe the buyer any $$. If you are in the money when the option expires the CME will put an equal number of contracts into your account at the strike price. So if you buy 10 $7 Dec Puts and come late Nov when the options expire Dec corn is trading at $6.00 then your account will be short 10 Dec contacts at $7. If in Oct Dec corn is trading at $6 and you want out you would sell those 10 Dec $7 puts for a little bit more then $1 because they still would have a little time value. | |
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option question
