Options Trading Tutorial

Does exercising a Put Option mean I have to buy the stock on Monday to realize a proft?

Or is the stock bought automatically when the option is exercised and I automatically receive the proceeds.

Public Comments

1. <<>> If you did not own the stock and you exercised a put option you will have a short stock position. You must cover that short position sometime by buying the stock in order to realize a profit, but you do not need to cover on Monday. <<>> The stock is not bought automatically. ------------------- Remember you can also realize a profit simply by selling an option for more than you paid for it, without ever exercising it. Most option traders prefer to simply sell the option instead of exercising it.