Options Trading Tutorial

options....once the strike price is hit, is my contract over?

I have an $8.00 strike price and on October 5th the price is $7.99 at 10:05am. At 10:06am the price hits $8.00. Are my contract(s) over that had a strike price of $8.00? How will I know? the shares in my contract are mine (covered). So once the stock price hit's the strike price of $8.00, I have to "buy to close" at market on my own?

Public Comments

1. you still have to exercise your option
2. Well, the expire on the third Friday of your expiration month. Since you bought the option, it's up to you whether or not you wish to sell it. The contract is up regardless of price but it will you will have to exercise it pending on whether the underlining asset went up or not. If it goes to 10, sell the shares and take the profit. If it goes under 8 you're out of the premium you paid. Remember, since you bought it, you don't have the obligation to sell. You can hang on to it if you wish.
3. If you are within .05 of the strike price, most option brokers will assume you want to exercise, so they will exercise for you automatically. If the option is still a few months off, then your options are still good. In fact they probably went up more than the stock price since there would still be a time premium left on them that you can sell.