Replies to post #297799 on Anavex Life Sciences Corp (AVXL)

[vg_future]

Steady_T, if I may jump in and answer. The calls will not be closed unless the buyer decides to exercise them and buy the shares. It has to make sense for the buyer to exercise them because the buyer has to pay $7.50 per share to exercise...he/she has to account for the price he/she paid to buy the calls in the first place. Since you said that you sold the calls before the runup, then I am assuming that you didn't get much money for the calls and might not be a big consideration factor for the buyer in exercising the options (unfortunately that is one down side to selling calls...the possibility of returns is limited unless the calls close worthless). You can buy back the calls to close the position (when you sold, they are marked as "sell to open" and now it will be "buy to close"). You cannot sell the shares on which you sold the calls until the calls are hanging on their head...3 options
1. Wait for the buyer to exercise - shares will disappear from your account
2. Buy back the calls - you are free to do whatever you want with the shares after this
3. Wait for the expiration date - they will be close automatically if the price of the stock is 5 cents above the target price ($7.50)

Hope that helps.

-vg_future

[raja48185]

I do not understand that. Can anyone explain why those calls haven't been exercised since they were so deep in the money

Depending when you sold those 7.5 calls - what the pps was.

May be some of those who bought the calls are waiting for :

* OE day, thinking pps will go higher from the time they bought (they may have sat on those calls in excitement, anticipating even higher pps than 28.xx only to be rudely surprised in less than a day to see those gains tank).

* Relaxing since they have time on their side - another 8 trading days (Feb 15 is a trading holiday due to President's day)

* Assuming that there will be another huge run up, one more time before OE, not to forget that there is a CC; a fond hope that it will thrust the pps into the 20s again

* Wont be surprised if a few assume that they can only exercise on OE day (like European Options)

[jimmy667]

99% of the time an Options market maker is the counterparty to an Options trade. They will not take the shares out of your account until they are needed to balance their market makeing operations. Being so deep in the money they should now trade with near zero time value. A net buyer will not exercise until later as now those in the money options provide leverage and they can use the cash they would need to exercise them to make other trades as there current value shows up in their accounts, they can not multiple for additional leverage unless they have portfolio margin or day trade margin privileges but still provide leverage same as non marginable securities.
Call your broker for advice what I say can not be taken as advice.

[attilathehunt]

"Can anyone explain why those calls haven't been exercised since they were so deep in the money? "

That would be 7.50/share worth of money that couldn't be put to work now...Why exercise early when you could deploy the funds elsewhere today?