alanm, this was not THAT long ago. IB rates were $1. 75 cents or even 50 cents on a $5 stock was stupid. There should have been a sliding scale based on the price of the stock. I contend it favored MM's because they got well on all the itm options that were not exercised.
even though its done all the time ,the option should be marked to the 4pm est stock close on the nose price which was 280 and his option is worthless ,any price after that is after hours trading and since the option is closed it cant be marked to an after hours stock price worth .30 and he should not have been assigned ...after hours trading is an add on that did not include after hours option trading..if a buyout rumor came out and the stock rallied to 310 at 1 minute after expiration do you think they would have said your option has expired worthless,they should, and what would they tell the guy with the 290 calls.. .this may be a loophole but it sounds black and white ,not a grey area,its worth asking an attorney about..before after hours trading ,trading after the close was illegal and any crosses to clean things up were done at the closing price
Granted this is an interesting thread, but you just answered a question that was posed nearly 7 years ago!
lol,didnt notice..didnt read the whole thread , i see he paid ib on page 6,got screwed, and goog at 280 should have set off a bell
Why not keep open an old thread. I think options quit trading on Friday, but arenot actually settled until Saturday and this does leave you open to the price change of a stock in the after market.
options have no trade in after market, post exp so should not be tied to after market moves at such time,its a license to steal
I know they don't trade, but settlement isn't until Saturday. You do have the ability to advise the broker if you do or do not want to exercise. I am not arguing that it is fair and it does seem like a license to steal, and in the tech age there really should be no reason for the Saturday settle anymore. Or at the very least settlement should only be for clearing the books and when trading ends the process should be done, but that just isn't the way it works, at least that is what I was always told.
the saturday settle was established before computer trading,electronically your bids/offers and trades are recorded ,done down to the millisecond and subpenny,it's over at that point,when saturday settle was happening,trades were matched at night by trade checkers,my firm and your firm matched trading sheets, the ones that didnt match, sell vs sell or 10 vs 20,call vs put ,were pulled by the trade checker and 2 markets makers hashed it out sat morn, the stock price was not an issue, the 4 pm print was it,that was over a decade back,there is no reason to mark the option at a post 4 pm est closing price other than to steal,the firms are responsible for legitimate representation of the markets action down to the sub penny and millisecond ,that's what they get paid for,the electronic service they are providing,why should it become all of a sudden ambiguous at this time of day once a month