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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: FaultLine who started this subject	10/20/2001 3:33:31 PM
From: DiB	Read Replies (1) of 5205

Thanks for the help on expired ITM calls. To recap, if the call is in the money and there is no explicit instruction to exercise, most "honest" brokerages will automatically exercise the option anyway and get the shares for the call owner. This will happen sometime between close on Friday and Saturday afternoon. There is also some chance that the call will be lost for the owner. Dan mentioned that some brokerages have a threshold of 75 cents, so they won't do anything if the stock price exceeds the strike price by less than 75 cents. In this event the call also could be lost. Frank mentioned, that Fidelity, after getting those shares, sells them. Will that be when the stock opens on Monday? The moral of this is that to avoid loss of capital the call buyer has to explicitly instruct the brokerage on whether to exercise a call or not. My question is, since the expiration is on Saturday, if the call owner decides not to exercise the call after close on Friday, then can the call be still sold? If "yes", then how can this transaction take place: as a trade afterhours, or the owner has to call the broker?

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