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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: NateC who wrote (489)	2/10/1999 6:58:00 PM
From: the options strategist	Respond to of 2317

Nate, I too have heard some say they were not called out of an itm option at expiry. But this is just one of those "things" that happen. If you are in the money at expiry, expect to be called out. If you are not that may be good, but play as if you will be.

To: NateC who wrote (489)	2/10/1999 7:52:00 PM
From: dealmakr	Respond to of 2317

Nate, If those calls were 8 points in the money on expiration day and he didn't get called out, he was lucky as it was an oversight. Most option exchanges will automaticaly exercise 3/4 point in the money at exp. If the stock, money or margin isn't in your account to cover you had better believe that your broker will do the trade if you don't. I had this happen to me with Revlon before that got taken out years ago doing a calander put spread. Traders that buy options (long)only have to risk the price they pay for the option, they don't necessarily have to have to choose to exercise and can close their trade position in the market by selling. Traders that write (short) either covered or naked options positions must meet the margin requirements of their broker prior to putting on the trade. At expiration per exchange rules all positions within the exercise guidelines are exercised. You have to plan for this contingency and be prepared to deal with it. Take it to the bank, that particular trade was missed if someone got away with 8 points. Any options trades that you intend to exercise as a backup precaution should be confirmed verbaly to your broker on expiration day without exception. Good Trading Dave

To: NateC who wrote (489)	2/10/1999 8:58:00 PM
From: jjs_ynot	Read Replies (1) \| Respond to of 2317

Nate, For all index contracts and some others, the exchanges and SEC require that ITM contracts be exercised and the books to be squared. For individual equities, it depends on the policy of the brokerage that handles the long side of the option purchase. Any brokerage that does not exercise an ITM option is going to get a lot of grief at best from the holder and potentially a lawsuit and/or arbitration claim. Expect to be called. Any other course is incredibly rare esp. in the last two years. Dave