I have five 12/18/26 deep ITM AMD $200 calls that I bought for $28,743 and they're now worth $133,170 (+$104K gain). If I exercise I would pay STCG on these, so I'm leaning towards exercising the option as I intend to hold shares for at least another year for LTCG purposes.
Another possible option is if I held until a week before expiration (bot on 12/04/26) I could just sell the options and pay LTCG. I'm honestly having a hard time weighing which option would be more beneficial.
Should I sell my deep ITM call options or exercise?
byu/Fr0HiKE inoptions
Posted by Fr0HiKE
6 Comments
Early exercise almost never makes sense. You give up all of the extrinsic value you hold by doing so. You’d be better off selling the options and using the proceeds to buy at market price.
I belive there is usually arbitrage between a long term contract and a more recent dated contract. Sell that one and buy a closer contract and exercise that because otheriwise you miss out on the gains of your call which usually has more value than the stock. Pi-fi on YouTube used to discuss that with people
If you’re 1 billion gazillion % sure you want to still be in AMD and are holding for another year excersize now is the right choice.
In most of the other cases, waiting for LTCG on the call and then selling it is PROBABLY the right thing to do
Bare minimum sell enough to break even and pay for the taxes. Because I promise that you’re going to feel a lot better being like oh if I had done that differently I could have made a ton of money, I just broke even.
Personally I would just sell the whole position and then if I was still bullish by something a little higher up.
Hire a CPA…idiot
Also you never know what can happens and those contract becomes worthless if it moves against you