Options Message Board - Msg: 12450693

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Strategies & Market Trends : Options

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To: taxman who wrote (584)	1/3/2000 5:41:00 PM
From: t2	Read Replies (1) of 8096

The excercising of options policy probably varies among brokerages. I used to (a couple of years ago--on MSFT)buy options very close to the strike just prior to expiration and would be delivered the shares automatically if these were in the money. I would get an urgent margin call first thing monday morning and i would sell.(Back then i was not an investor but more of a gambler). Neither of my brokerages gave me any trouble. TD Waterhouse and another Canadian online broker Bank Of Montreal investorline never bothered me about the equity/cash prior to excercising. Maybe if one questions the broker, that is when a person can get into trouble---otherwise the option is automatically excercised if 75 cents in the money. I think the brokers just don't follow the rules that strictly sometimes if the rule you mention exists. I don't believe these rules are dictated by the SEC but am not sure. That could explain why some brokers don't follow them. I know when i daytraded (for a very short time), there were no exceptions on any rules related to margin or maintenance but these were dictated by the SEC.

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