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. asked in Business & FinanceInvesting · 3 years ago

How do I exercise a put?

I bought a $215 7/27 FB put but I do not have any shares.

FB dropped to $175. If I buy shares on Robinhood tomorrow, do I use those shares to sell at the $210.10 strike price?

3 Answers

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  • 3 years ago

    Based on your expressed knowledge, you should not be trading options and using Robinhood, you shouldn't be trading anything.

    Go to the firm that is holding you put position and sell it.

    Source(s): from The Street
  • 3 years ago

    Generally it is better to simply sell the put option instead of buying the stock and then exercising the option, but not always. With so little time left before expiration and an option that far in the money, it probably makes little difference.

    At times a deep in the money option can become relatively illiquid giving it a large bid-ask spread. If that happens it may be better to buy the stock and exercise the put.

    You mentioned using Robinhood to buy the stock. If you bought the optio using Robinhood that is fine, but if you bought the option with some other brokerage you need to use that brokerage to buy the stock.

  • Jerry
    Lv 7
    3 years ago

    It would be cheaper and easier to simply sell your put (at a much higher price than your purchase price).

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