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To: BAXTERBOO who wrote (2411)8/18/1999 6:19:00 PM
From: Rocket Scientist  Read Replies (2) of 2693
 
A better than average Yahoo post on subject of puts:

Expiring options (an answer I hope)
by: abc23654
28980 of 28997
Spent a better part of day calling the various bodies associated with the options market, "Nasdaq Stock Watch, OCC (Options Clearing
Corporation), NSCC (National Securities Clearing Corp), Nasdaq Operations" and my brokerage firm. It's interesting how few people
really know what happens in a somewhat unique situation like this. In fact I promised to call people at the various organizations and let them
know what the final answer is. I will sum up what I've learned:

1) Both Put & Call Options are still exerciseable according to the OCC

2) Failure to deliver shares is governed by the NSCC (owned by Nasdaq).

3) Under normal conditions a "close-out" would occur where the NSCC would go out and buy the shares, at any price they want to, in
order to deliver to the put writer the shares and the investor would be responsible for the cost of those shares.
4) During this period of the underlying stock being halted by the exchange, instead of shares, a cash equivilant is required to be delivered by
the brokerage. This amounts to a netting of the last traded price and the exercise price (less commissions).

5) For those, including myself, who have never actually exercised an option, the OCC states that an order to exercise must come 1 day
prior to the last possible trading day of the option. Meaning, the deadline to exercise is tomorrow.

I'll finish with a final disclaimer:
This is new territory and I barely know what I'm talking about, confirm this with your broker and make sure they are recording it.
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