>TL;DR: I am considering starting a business that would provide short-term loans to investors for the purpose of executing options strategies. Would this be a good idea?
>This could be a good idea for a business if you can find investors who are willing to take on the risk. There is always the potential that the options will expire worthless, in which case the investor would lose their entire investment.
Often by expiration the option itself just converts over to the intrinsic value if it’s in the money. no need to exercise if the put holder can just sell the contract at expiration for intrinsic value ($5000 in your example or $50/contract)
This is a good point. There would have to be an aspect of market analysis from the loaner to pick and choose which investments are worth loaning money too.
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VisualMod t1_ja41gey wrote