Alan answers a question from William of Manteca, CA. William asks:
“What triggers an in-the-money strike in the following example? I purchased Home Depot stock for $22.25 per share and sold the $20 in-the-money call for $3.50. (Not bad.) On or before expiration Friday the share price never hits $20 but falls, let’s say, to $20.05. Would the buyer exercise the option, or is he, by contract, forbidden to do so?”
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