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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (2812)	10/20/2001 12:21:59 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 5205

From a point of curiosity, not practicality ... the broker maintained that since they had not been notified of the individuals intention to exercise they had no obligation to credit the transaction to the client We're talking about what people commonly refer to as option contracts. Is there a standard contract and has anyone ever read the terms of the contract? --Mike Buckley

To: Dan Duchardt who wrote (2812)	10/20/2001 4:36:57 PM
From: JGoren	Respond to of 5205

dan stated what is basically my understanding. the point above exercise price at which automatic exercise takes place may be different from broker to broker. the reason automatic exercise is set somewhat above is the assumption that the holder doesn't want to exercise, if e.g., closing is 1/8 pt above strike price, because the transaction cost still leaves no room for profit upon sale of the underlying security on Monday. the kicker is, as mentioned previously, any news that is announced after Friday close or anticipated news, that would give the stock price a lift on Monday morning that would allow a profit. Dan is also correct about exercises being done on total brokerage house position.

To: Dan Duchardt who wrote (2812)	10/21/2001 12:50:08 AM
From: BDR	Read Replies (1) \| Respond to of 5205

From Fidelity's Option Application: Options are exercised in accordance with the rules of the Options Clearing Corporation. I am aware of your requirements and time limitations for accepting an exercise notice. I am also aware that I must notify Fidelity no later than 4:20 p.m. (ET) on the business day immediately preceding the expiration date, if I do not want Fidelity to exercise on my behalf an equity option which is “in-the-money” by 3/4 of a point or more, or an index option which is “in-the-money” by more than 1/100 of a point or more exercised. In the event my option contract(s) are exercised, I understand that you will liquidate any resulting security position at my sole risk, for which I shall be charged two commissions. I agree to pay the full aggregate exercise price for any underlying security covered by the exercised option contract(s). Further, in the event that I fail to instruct you to exercise an equity option which is “in-the-money,” by less than 3/4 of a point on the business day immediately preceding the expiration date, I hereby agree to waive any and all claims for damage or loss that I might have against you, at the time or any time thereafter, arising out of the fact that an “in-the-money” option is not exercised. Mileage may vary depending on your broker.