Automatic Execution Question

Discussion in 'Options' started by Toonces, May 16, 2003.

  1. Toonces


    When a option is automatically exercised at expiration, it has to be 3/4 of a point in the money for a customer. What is that based on? The last price the stock trades on Friday at 4 PM? The best bid? Best ask?
  2. cvds16


    you can always exercise if you want to, you can even exercise out-of-the moneys (though you better have a good reason for that), just ask your broker or do it electronically.
  3. ktm


    If you are talking equity options, it is usually based on the last trade. Keep in mind that the option technically expires on Saturday, and that any news out Friday after the bell that could move the stock (in after hours Friday or on Monday open) could affect whether you get exercised or not.