Said said:
The thing with "if called away" is that it rarely happens. I think nearly all people buying calls do not do so to eventually execute them, but are only interested in selling the calls for a profit.

Options are rarely exercised before expiration because, except in some wierd corner cases involving dividends, it is more profitable to close the option position and either buy or sell the underlying instead of exercising early. This is because there is always at least some "time value" to the option that is lost on exercise.

If you "write" a call (sell a covered call) and you do not "close your position" (buy back the covered call you write) AND at expiration the call is in the money, I GUARANTEE you will see that call exercised.

So it is not a statistically random process that the longer you hold a call, the more likely it is to be exercised. It essentially will not be exercised before expiry, and it absolutely will be exercised if you have written the option and it expires in the money.

Enjoy,
R:)

Berkshire Hathaway FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.