Auto-exercise/assignment at expiration

Discussion in 'Options' started by earth_imperator, Aug 27, 2022.

  1. Which price of the underlying is used for expiring options?
    Is it the closing price on the expiration date (ie, usually Friday),
    or is it the opening price on the next trading day (ie. Monday)?

    Which company/institution is handling these cases? Is it the "OIC" or the "OCC"?
    I think it's not the broker. Or is it?

    Update:
    Just found this page. Seems to answer the above questions.
     
    Last edited: Aug 27, 2022
  2. Robert Morse

    Robert Morse Sponsor

    The closing price of the stock on the primary exchange (Where it is listed) the day of expiration. The OCC handles it with the member firms.
     
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  3. ETJ

    ETJ

    The OCC has two sights that carry a lot of the data. The OCC - is a public sight that has some decent data. MyOCC is pretty much an industry sight and it has a ton of data and access is more limited. Both are free, but an MYOCC subscription goes to clearing members and larger users. Both sites are free and it is not uncommon for a brokerage house to share its data with a larger user. In the US we only clear down to firms, not members so no customer info is exposed. Ask your broker if they are willing to grant you access.
    The first thing you'll discover is many of the retail claims made are absolute fiction.
    Both sites are currently down for maintenance.
     
  4. TraderX22

    TraderX22

    Which of the retail claims are fiction? Seems to me, when you make such a generalized statement its condescending towards retail "dumb money"
    Whereas naming the "retail claims" you are referencing that you are saying are fiction, has the potential to educate anyone who comes across this post who may hold some of those "fictional claims"
    You seem to have knowledge to share, which I for one appreciate. Generalities are the enemy of useful information though. ;)
     
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  5. ETJ

    ETJ

    Early exercise claims made on this site are generally fiction.
     
  6. Interesting. But you need to provide some more info. What part of the early exercise process do you mean?
     
  7. qwerty11

    qwerty11

    Also wondering what you mean. You do know early assignment happens often (not including HTB and dividend)?
     
  8. taowave

    taowave

    Adding to what Rob said,you should also watch the after market for large adverse moves as it relates to your short options.

    Stock may close at 166,but if you are short the 165 put and the stock sells off to 164 after hours,you will be assigned.

    From what I understand,retail has till 5 to exercise,while the big firms have till 7 or 8..


     
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  9. TheDawn

    TheDawn

    Options exchanges have a final cutoff of 4:30 PM CST or 5:30 PM EST to receive exercise requests and that applies to everybody no matter how "big" the firm is. They do not have until 7 or 8. PM to send in exercise requests. https://www.optionseducation.org/referencelibrary/faq/options-exercise, also specified by FINRA: https://www.finra.org/rules-guidance/notices/information-notice-020321#:~:text=FINRA reminds members that option,or not exercise the option. But retails have to send in exercise requests lot earlier than that, usually at 4:15 or latest 4:30 PM EST depending on the broker. For IB, I believe it's 4:15 PM EST.
     
  10. @taowave, the question was about auto-exercise/auto-assignment without the user doing anything.

    Are you indicating that the official close price of the underlying at 4:00 p.m. is not the last word?
     
    #10     Aug 29, 2022