I am an option call holder that has 1 call @ 600 strike. The stock closes at 595 on friday and technically my option would expire worthless but the company has better than expected earnings and the stock rises to 650 after-hours. Since i have until 5:30 PM ET to exercise, can i still exercise my call option? Is this allowed?
Yes. In fact, some people holding short options get caught by such things. They think that if the stock closes (regular hours) OTM then they are safe, but then they get assigned due to people exercising options based on afterhours move in the stock.
Speak to your broker about the 5:30pm est cut off. They have to get in the contrary exercise notice to the OCC by 5:30pm. They might require your request earlier.
as a follow up to the previous poster's response, there was a famous case a while ago that adam warner who used to write the dailyoptions website of a company that annouced a buyout immediately after the close on fri of expiry - well all those short otm calls thought they collected the premium as usual. w-r-o-n-g. they ended up selling calls for $0.10 that were worth more than $10.