Basically the $15 call option means that they have the option to buy the stock for $15. Since anyone can buy it at $13 that means he won't exercise it (or he'd have to be an idiot to exercise it) so he just lets them expire.

 
jgx101:

Basically the $15 call option means that they have the option to buy the stock for $15. Since anyone can buy it at $13 that means he won't exercise it (or he'd have to be an idiot to exercise it) so he just lets them expire.

Not necessarily, it could be physically settled and person A might need the underlying for other purposes. But yes, normally he would just lose the 100.

 
Maximus Decimus Meridius:
jgx101:

Basically the $15 call option means that they have the option to buy the stock for $15. Since anyone can buy it at $13 that means he won't exercise it (or he'd have to be an idiot to exercise it) so he just lets them expire.

Not necessarily, it could be physically settled and person A might need the underlying for other purposes. But yes, normally he would just lose the 100.

What are you talking about? Stock X can be physically settled?

 
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