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What's the lowdown on options counterparty risk?

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December 19, 2008 – Comments (2) | RELATED TICKERS: MVL.DL

I should have asked this before pulling the trigger, but I just bought VTQAG for $7. They don't expire until January 2011, and the strike price is a modest $35. (I guess I LEAPt before I looked - ha ha.) For me to double my investment, Marvel just has to go to 49 in two years. That's only about 65% in two years for a great company.

So is there serious counterparty risk that no one will be around to track down the writers to pay out the shares for these options? Or is it just that options investors are so impatient that LEAPs don't get much traffic?

2 Comments – Post Your Own

#1) On December 19, 2008 at 2:32 PM, goldminingXpert (29.65) wrote:

virtually no risk, the American options market has never failed to deliver shares or cash as necessary by contract.

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#2) On January 05, 2009 at 1:37 PM, FleaBagger (28.84) wrote:

Thanks, GMX!

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