Welcome to your source for answers to questions about option concepts, strategies, and terminology. A new question and answer is published each week. To view the Ask the Institute archives, click the "Ask the Institute Archive" link below.
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This week's question:
DATE: March 08, 2010
QUESTION:
Is it possible that there could be more calls on a stock than there are shares of this stock?
ANSWER:
Theoretically, yes. If a stock has let?s say 100 million shares outstanding, it could be possible for the number of options opened on this stock to cover more than 100 million shares (ie, there could be more than 1 million calls opened). But remember that there are positions limits, so that no one investor (or group of investors acting together) can hold more than a fraction of the options.
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