when you buy 100 XLF calls at 0.05, you paid $500 for the right to buy 100*100 shares of XLF at expiration, of course you $500 is gone, because $500 is paid for the right.
Now option writes will deliver your 100*100=10,000 shares of XLF at price of $12.00, does your account has 12*10,000 cash balance for that? that is $120,000, if not, you are in trouble because you broke the basic SEC rule.
I don't understand how come still have people like to do gambling like this. |