Q: I recently bought a call option. Since then, the stock price has risen and so has the call option. I wish to sell my call option for a profit but am I obligated to deliver the underlying stock if the option buyer decides to exercise his call option?

A: No, if an executed sell-to-close closes the call you own without creating a short position. Selling to open creates a writer’s obligation; selling to close removes the long option. Confirm the series, quantity, instruction and fill. Selling more contracts than you own can leave a short position, and an option already exercised can have separate stock or cash obligations.

More Frequently Asked Questions

  1. What are the differences between standardized options and employee stock options?
  2. Does an increase in open interest imply a bullish sentiment?
  3. I own options on a stock that has just declared a 2 for 1 stock split. What happens to my options?
  4. What's the difference between options and futures?
  5. Why do some stocks have options for trading while others don't?
  6. Can i be assigned if I buy-to-close a short position?