LogFAQs > #949761647

CoolCly posted...

What happens if the person you bought the call from doesn't have the shares (because of the squeeze)? What if they don't have the money to buy at the absurd price it would rise to for you to profit off this?

I was wondering the same thing about puts - if someone doesn't have the money to buy your shares when you exercise that would also be a problem. Does the broker of the person have to cover it? Or do you have to take the individual or their broker to court for remedy or something?

I guess you could just sell the option also but will the price remain strong because there is always confidence it will be honoured?

I am not 100% on this but I believe the broker is on the hook to you, and then they will go after the call writer, in court if necessary.

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September 1, 2003; November 4, 2007; September 2, 2013
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