IB - Short Calls/Puts at Expiration

Discussion in 'Order Execution' started by DisciplinedHedg, Dec 12, 2002.

  1. Def or any other IB user who is familiar with this,

    In the past when I've sold options, they've expired worthless so no action was required of me.

    This month, I will be short calls/puts (having sold for income) and holding the underlying stock.

    Since these options will be in the money, and I don't care that the stock will be called away (I'm fine just capturing the premium), do I have to take any action?

    Or do I just let IB handle it and my stock will be called away automatically?
  2. def

    def Sponsor

    If you are short calls/long stock upon expiration your calls will be assigned and your stock will be used to deliver.

    In your case your options net out to flat and thus they'll offset each other in the assignment process and there is nothing to do.

    So there is no need to close the position (unless you want to sell your stock to get flat) as it will cost you in commissions and you'll end up paying the spread.