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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)
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To: bogumil who wrote (1649)9/30/1999 12:25:00 AM
From: Madpinto  Read Replies (1) of 2241
 
First of all, it depends on whether these are equity or index options. If they are the latter, you will get the parity value in cash without doing anything more. With equity options, the options will get automatically exercised if the finish at least 3/4 in the money. This SEC rule is universal from brokerage to brokerage. If you don't have the money to buy the stock the following week, you get a margin call. The brokerage house will sell your stock if you do not meet the margin call. If the stock is halted at expiration, the exchanges usually take the position that the stock price cannot be identified and leave it up to you to exercise (no matter how far in the money you believe the option to be.) Although I believe everything I wrote to be true, I suggest you call the CBOE at 1-800-OPTIONS to get specific advice when making trading decisions.
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