Say I have a bull call spread, a large number of contracts in UVXY, and then for some reason the markets get closed during the day of options expiration (9/11 example). How would I know if I need to exercise the long portion of my contracts to protect the contracts I wrote?
When you get assigned on a short option I believe they'll exercise your long to meet the obligation of the short assignment. In the case of a bull call spread you'd only be assigned if the market is above the short strike in which case you're at max profit for the spread. In other words as long as you have a hedge in place you're safe.
http://www.optionseducation.org/strategies_advanced_concepts/strategies/bull_call_spread.html "Assignment Risk Yes. Early assignment, while possible at any time, generally occurs only when the stock goes ex-dividend. Be warned, however, that using the long call to cover the short call assignment will require establishing a short stock position for one business day, due to the delay in assignment notification. And be aware, any situation where a stock is involved in a restructuring or capitalization event, such as for example a merger, takeover, spin-off or special dividend, could completely upset typical expectations regarding early exercise of options on the stock. Expiration Risk Yes. If held into expiration this strategy entails added risk. The investor cannot know for sure until the following Monday whether or not the short call was assigned. The problem is most acute if the stock was is trading just below, at, or just above the short call strike. Assume that the long call is in-the-money, and that the short call is roughly at-the-money. Exercise (stock purchase) is certain, but assignment (stock sale) isn't. If the investor guesses wrong, the new position on Monday will be wrong, too. Say, assignment is expected but fails to occur; the investor will unexpectedly be long the stock on the following Monday, subject to an adverse move in the stock over the weekend. Now assume the investor bet against assignment and sold the stock in the market instead; come Monday, if assignment occurred, the investor has sold the same shares twice for a net short stock position, and is exposed to a rally in the stock price. Two ways to prepare: close the spread out early, or be prepared for either outcome on Monday. Either way, it's important to monitor the stock, especially over the last day of trading "