Last week in my portfolio there were 10 ITM options expired this weekend with strike price 455. The close price was 457.62. I expected it would result in 1000 stocks sold. So I purchased stocks back after the regular trade hours to maintain delta neutral. But today I found the options were not assigned and now my portfolio are bullish. I understand that the short option assignment were relying on the other party's decision, no matter how deep they were in the money. My questions are: How soon can we know if the option would be assigned or not (my broker is IB)? How do we usually manage such uncertainty of option assignment? Thanks!
It depends on the type of the option. https://www.cmegroup.com/education/...rence-european-vs-american-style-options.html This article does a good job of explaining exercise times.
Your firm gets two OCC memos. One on the 6th with special pricing consideration and another on the 7th with firm-by-firm exercise/assignment. If they are around and all will be around on Saturday. Call them. Autoex should have hit you and I would be more concerned with leaving all most $3000 on the table - assuming you and your firm did nothing. Next time trade out prior to the close or exercise and buy the stock at strike.
No money was left on the table. The almost $3,000 is a negative amount subtracted from the premium collected on the short call options, which expired ITM.
What is "special pricing consideration"? So no one would be able to tell until 7th? What am I supposed to say when I Call them? Thanks!
OCC Expiration Memo - October 6, 2023 External no-reply@theocc.com <no-reply@theocc.com> Oct 6, 2023, 10:18 AM to me The following information memo was posted Friday, October 6, 2023: Memo#: 53328 Title: DHR1 Options - Expiration Pricing Consideration Search for more information memos on the OCC at https://infomemo.theocc.com/infomemo/search Visit our website at https://www.theocc.com You are receiving this email because you provided your email address to receive information from OCC. Please do not reply to this email. To unsubscribe from this email list or to manage your subscriptions, visit OCC's Subscription Center. If you are unable to update your email preferences through the Subscription Center, contact us. Sent from The Options Clearing Corporation 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 | No statement in this email is to be construed as an endorsement, recommendation or solicitation to purchase or sell a security, or to provide investment advice. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of the disclosure document, Characteristics and Risks of Standardized Options. Individuals should not enter into option transactions until they have read and understood this document. To obtain copies, contact your broker, any exchange on which options are traded, or The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 (investorservices@theocc.com). This is what a Special pricing memo looks like. They are free - just go to theocc site and register. Exercise/Assignment memos go to the member firms and they should be there on the days after expiration. They hit about 10 AM Central. Your firm also gets a contrary exercise memo - for normal settlement - a couple of days before. This serves as an expected exercise/assignment notification. Make your own judgments about your brokerage relationship.