ITM call options?

[taywu]

Pretty sure this but couldn't find a thread on it, sorry if this is a rehash on another thread. What are the strategies for deep ITM calls for someone who wants to accumulate shares? I'm sort of newish to options but I've been accumulating shares since 2015 and continue to have a bullish 5-10 year outlook. I have 3 June 17 $640 contracts in my regular brokerage account that I've been trying to figure out how best to turn them into shares.

1. Sell TSLA shares to fund all 3 contacts? I guess there's higher tax hit. implications
2. Sell some options to partially fund maybe 1 contract?
3. Use margins to fund it?
4. Sell the options and use the profits to buy the stock

I"m sure there's no one answer and is highly dependent the individual. Thanks in advance!

 

[ggr]

Pretty sure this but couldn't find a thread on it, sorry if this is a rehash on another thread. What are the strategies for deep ITM calls for someone who wants to accumulate shares? I'm sort of newish to options but I've been accumulating shares since 2015 and continue to have a bullish 5-10 year outlook. I have 3 June 17 $640 contracts in my regular brokerage account that I've been trying to figure out how best to turn them into shares.

1. Sell TSLA shares to fund all 3 contacts? I guess there's higher tax hit. implications
2. Sell some options to partially fund maybe 1 contract?
3. Use margins to fund it?
4. Sell the options and use the profits to buy the stock

I"m sure there's no one answer and is highly dependent the individual. Thanks in advance!

I can't think of any scenario in which (1) makes any sense. The choice between the others depends mainly on tax implications. If tax doesn't come into the equation (tax-exempt account and you just want maximum profit and to end up with stock), (4) is best at any time before expiry. (2) and (3) are better if you want/need to avoid a largeish taxable event, you defer the tax on the shares from the exercise until you sell the shares, and if you hold them for more than a year it will become long-term capital gains, but it doesn't maximize profit; it gets better closer to the contract expiry, and most brokers will try to talk you out of exercising when there is any time value left in the options.

 

[taywu]

Thanks @ggr. Apologies for the mess in the questioning. This is my regular brokerage account so the tax implications is a consideration. I was leaning towards 2 or 3 since I probably missed the opportunity to sell earlier. Appreciate the input.