Hey all, I read somewhere that novice option traders if they want to do indicies they're initially better off using non cash indicies on vertical spreads. If on you're short (call or put) position you're exercised (that night) and prior to the market opening some catastrophic event occurs and the market gaps down you're screwed if you used the cash indicies (i.e. OEX, SPX) as the corresponding cash value of the index is netted against the strike amount and the difference is paid to the option buyer. However, he said if you used an ETF which tracks an index (i.e. SPY) when you're exercised you effectively become short the stock while you still have the other leg of your spread intact. Am I missing something here or what? If you have other advantages/disadvantages of using cash and non-cash indicies would love to hear it p.s. I'm confused since I thought early exercise on cash settled indicies rarely occurs?