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Ask the Institute

DATE: March 13, 2002

QUESTION:
If a LEAPS option expires, is the owner obligated to purchase the stock?

ANSWER:
The owner of a call option is never obligated to buy the underlying stock. A call option is a contract giving the owner the right to buy the underlying stock. Even if a call is in the money at expiration, the owner of that call cannot be required to buy the underlying stock.


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