Discussion in 'Options' started by Arastormx, Nov 16, 2009.

  1. Arastormx


    According to OCC statistics for year 2008 (for activity in customer and firm accounts), the breakdown is as follows:

    Closing Sales - 69.4%
    Exercised - 11.6%
    Unexercised at Expiration - 19%

    So, in 2008, 19% of all options positions in customer and firm accounts expired unexercised; 11.6% of these positions were
    exercised; and 69.4% of these positions were closed out through sales.

    My impression was always that you could either A) excersize or B) let it expire worthlessly. This represents a third option. Im curious to know what the term "closing sales", or "closed out through sales" means?

    Anyone that could answer this would be greatly appreciated.
  2. erol


    if you sold the options, or "Sold to open"

    you can buy them back, or "buy to close"

    if you bought an option, or "buy to open"

    you can "sell to close"

    Similar to stocks, you can buy, then sell the options (no need to exercise).

    If you short options, you can buy them back, similar to stocks.
  3. Arastormx


    Correct, I understand that.

    However, by those statistics its saying only 19% expire unexcersized, and with only 11% being excersized.

    What happens to the rest of the options?
  4. Arastormx


    Is that 69.4% statistic saying 69.4% of the time the writer of the option buys back his option that he wrote?
  5. erol



    the writer bought back or the purchaser sold the option they bought prior to expiration or exercise/assignment.