OCC options assignment price?

Discussion in 'Options' started by butterfacetrader, May 19, 2017.

  1. So the OCC assigns if it is $0.01 or more ITM.

    Is there a specific time where they look at the price? Or just the flat out last closing price print?

    Does aftermarket count?

    I'm looking at a position that is iffy. Looks like the algos pinned it for OPEX. It literally printed $0.01 over the strike put I sold at the close. So technically my option position should be worthless, right? But right now the afterhours, it is lower than the strike.

    Guess we find out over the weekend. But just wondering what time they use for automatic assignment?
     
  2. Robert Morse

    Robert Morse Sponsor

    My understanding is the closing price on the primary exchange the stock is listed on.
     
  3. FSU

    FSU

    What Bob said. But if the stock is trading below the price of your puts in after hours, it is possible you could still be assigned. The owner of the put could buy the stock now, after hours, and then exercise the put and lock in a profit.
     
  4. In the future you should avoid running it down to the wire to squeeze out a few extra cents.
     
  5. Thanks guys. Looks like no assignment.

    Regarding someone buying in afterhours and exercising, that's a good point. Probably lucky here. In this case it wasn't much lower even in the afterhours, but interestingly the asking price was always at the strike or higher and never under, making even a profit in this case not possible. But I guess if some market moving news hit that would be a different matter.

    Regarding not squeezing a few cents. That's a good point too. However, literally in the last 30s before close, it was 15c above the strike. So I thought I was free and clear. But it got slammed at the close in the last 30s. Still, it ended up above the strike though. But yeah, I hate the 'uncertainty' it brings to hold to expiration that close to the strike, because I will be unable to close out the options position after market closes and can't hedge anymore unless I start shorting right away in the after market if I know I am to be assigned that I don't want. I had an opportunity to close it manually, but it would cost me a total of around $6 or something including commissions. I'm cheap so.