Options Exercise

Discussion in 'Options' started by Tal priel, Oct 24, 2020.

  1. Hi,
    If i sell a call option that expires in the money and i hold
    another call option with lower strike that will expire after the call option that i sold,
    in that scnerion does ibkr will exercise my long option
    automaticly or that i need to do some active action in order to avoid assigment on my short position?

    Thanks,
    Tal
     
  2. JamesJ

    JamesJ

    They don't early exercise your option.
     
  3. BKR88

    BKR88

    Your long call will likely be left alone (since not at expiration) and you'll be short from the assignment.
    Your losses are capped so short position likely not closed as long as you keep the long call.
     
  4. So , my only option in order to avoid assignment is to buy back the short leg?
     
  5. BKR88

    BKR88

    Yes, or exercise your long call and let your short call close the long position.
    Your long call won't be at expiration so shouldn't be exercised automatically to cover the short call.
     
    Last edited: Oct 24, 2020