SUNW is right now at exact 3.99 X 4.00. On this last trading day before the option expiration date for Oct, the underlying tends to be pinned to the strike price. I have sold some covered calls Oct 4C on SUNW to generate some cash in my IRA account. I’ll let them go expired or get called away.
Option strike price sometimes has interesting effect on the market during option expiration week. Looking at MSFT chart, we can see it slides towards 25. Based on the option trading volume data at Yahoo, there were 10,791 contracts (Apr04 25 Call) changing hands with 79,265 still outstanding, the heavest traded strike today. For premium sellers, it’s to their advantages to let the contract expire worthless, which means in this case that MSFT has to go below or at 25 to let Apr04 25 call contracts expire worthless. I have a small long position where I had sold some at 0.95-1.05 earlier and hold some until today I sold them at 0.7.