The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Is it better to exercise an option or sell it?” This is a very good question because I think naturally, a lot of people, especially newbie traders immediately default to the idea of just letting an option contract be exercised at expiration. Now, this could be an option contract that’s in the money, this could be dealing with an option spread where both contracts are in the money and they will cancel each other out, but many people just don’t go through the hassle of closing out the option contract or selling it back. But the reality is that for most brokers and you’ll have to check with your broker just to make sure. For most brokers, they’re going to charge you a very high fee to go through the exercise and assignment process and they will generally charge you on a per contract basis or on a per trade basis and it will almost always be higher than the cost of just buying ba