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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Sowbug who wrote (30863)	1/17/1998 3:05:00 PM
From: Glenn D. Rudolph	Respond to of 61433

Ameritrade says it may, in its discretion, automatically exercise an option if it's 3/4 of a point in the money. I'm not sure whether that's a more general rule than just calling away stock from a writer of a covered call. Or maybe it's totally inapplicable. This is in excess of the CBOE rules. It is a rule established by the clearing house for Ameritrade to give the house liquidity. Clearinghouses must adhere to the minium rules and must exercise an in the money option at expiration when it is 1/4 point or more in the money at expiration. However, the clearing house here is maintaining the right to make an excercise prior to expiration when an option is more than 3/4ths in the money. Not the same issue. This is closer to the concept of covering ones short position if the clearinghouse needs the shares. Other examples are liquidations for a maintenance call prior to the three days if the clearinghouse needs the funds. Glenn