Word of warning, from my experience today:
I put in a number of "sell on the close at market" orders in on my DIM QCOM calls today, using the options team at Fido. I figured there's often been a late-day runup in Q on options expiration day, and so I'd try to take advantage of it if it happened, and also wouldn't have to monitor the price every second and decide when to sell. More importantly, I figured that at the close, the large spreads would collapse to near zero, and I'd get maybe 1/4 or 3/8 less than intrinsic value for my calls (figuring the specialist still needs something to make the transaction worthwhile).
Well, long story short, "making it worthwhile" apparently means different things to different people when there are large sums of money involved, and I got scr*wed. My sell orders all filled at an effective price of 153 3/8, or a full 1 1/2 points below market close price for Q. That ended up being a five-figure difference from what I had expected to get back from the sales.
Yes, I know you're putting yourself at the specialist's mercy with any kind of market order - I just figured in my naivete that there'd be no way they'd take that large of a bite on what for them is a totally no-risk transaction, as the price at the close is known and fixed, and they can perform their conversions and reversals and just scoop up the cash without any exposure. If I had known it would happen this way, I certainly would have taken a chance selling them myself with a limit order earlier in the day.
Anyways, I will be contacting the Pacific exchange (where the sell orders all were filled), but we all know what my chances of getting any sort of relief at this point are. <g>
-Rose-
PS: makes me even more glad I exercised as many Q calls as I did yesterday rather than selling them! |
