on the money option

Discussion in 'Options' started by trader198, Oct 26, 2012.

  1. experts, today I have options expired on the money.

    the symbol is S.

    I bought 200lots of puts 5.5 at 0.01 Thursday, and I bought 200lots of calls 5.5 at 0.02 Thursday. I thought eitherway goes 0.1, I can make something.

    the market first jumped, wait for 0.1 jump and sell my calls, then it dipped, my calls has no bid. then I sold my puts at 0.11 (100lot), another at 0.08~0.11.

    the funny thing is it goes back to 5.48~5.5 (actually I wish it goes 5.5+, so that way I can make some too). at the closing, my calls could not be sold. and the market close at 5.5 exactly.

    will my call be exercised? I do not want to have 20k S.
  2. Did I hear you right... if you bought calls you have rights not obligations.... if you sold the call you could get assigned on a strike pin not if you bought
  3. You're stating that you bought the Oct weekly 5.5 straddle for three cents? A day before expiration?

    Not possible.
  4. A very popular sentence to explain calls used in books and on brokers websites. It leads to the misconcpetion that you can buy calls and forget about them, you have the right to buy the stock "BUT NOT THE OBLIGATION". If they go 1 penny ITM you get auto assigned, what happened to "BUT NOT THE OBLIGATION"?

    That sentence should be amended to include a short blurb on the risk of auto-assignment.

  5. http://www.cmegroup.com/clearing/files/IR-284_OptionsExercise.pdf

    " Abandonment of Automatic Exercise: Recall that long position holders reserve the right to decline automatic exercise, even if the option series they own has expired in the money. To see what this means for pro rata matching, let’s revisit the example in Exhibit 3."
  6. thanks god, my calls are not exercised. logically there is no sense to do that. if end up in the money, definitley they will exercise. hate to have the real stocks. I have bad experience with leaving ITM in experiation, I bought too much, IB warned me about my option trading privilege, that is scary, I did not want that happen.

    I bought puts first , one moment there is no bids, it was easily filled. acutally S was dropping, then in the near closing, S dipped, I saw its 5.5 calls dropped to 0.01 X 0.02, I felt it is hard to buy 0.01, then I bought it with market limit at 0.02.

    I do did that. since AAPL thursday AH earning, so I looked at others. when I look at aapl option before earning, I know there is nothing I can play. I wrote two limit orders, one is NQ 2603, not filled just 1.5 point away from the announcement, late i bought 2623.5, made a quick 20points gain. another one is I put a 533 limit buy order for AAPL, but way too low. I did not chase it since I did not want to trade AAPL, too much money is invloved.

    S is kind of interesting. it is dropping gradually, trending down very well, wave up, then down more. but I am not sure about the 5.5 in expiration. that is why I bought 5.5 calls near the closing. I rarely do that. 5.5 is a key price, but neither breakdown or bounce happens.

  7. I buy rights not obligations... what a croc... if I buy premium I don't want the worries of selling premium... I never knew there was auto assign.... that's so jacked.... I can't buy penny options in the money at option expiration because it says I don't have the required funds.... this is such a way to protect the inside from the fuzzy ness of pricing at expiration... I can buy otm options at the close..