|
It's true. It's almost always a bad idea for an individual investor to exercise an option. It's easier to sell the option when you no longer want to own it.'
The exception occur when you want to own the stock and collect a dividend. Be careful because not all dividends are worth enough to warrant the exercise of a call option.
The broker does NOT exercise any options. It's strictly your decision. But if you own an option that is in the money - and you don't sell it by the time expiration arrives - then the OCC (Options Clearing Corporation) automatically exercises those options for you. That's a bad thing and often results in a margin call. Don't forget to sell your options when it's time.
|