SPX Monthly Option Assignment

Discussion in 'Options' started by Arnie Guitar, Nov 21, 2015.

  1. I sold the Monthly SPX 2090 calls and got an email today that I was assigned.

    I thought the settlement was the open on Friday morning? The S&P did not get above 2090 all day Thursday and did not gap up on Friday's open, not getting above 2090 until about 15 minutes into trading.

    The option wasn't listed on my screen all day... I thought I was in the clear.

    What gives?
     
  2. rmorse

    rmorse Sponsor

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  3. Sig

    Sig

    Settlement is the open of each stock in the index, not the index itself. Common rookie error with SPX and the reason not to hold it to maturity unless you're actually hedging the entire underlying basket of stocks or have some other compelling reason to want that type of settlement. AM settled options often end up with a settlement price that bears little relation to the index open, especially when there are large moves around the open. You could have traded SPXPM last week, or SPX weeklies any other week, and received the PM close which is the index value at 4:00 EST.
     
    Last edited: Nov 21, 2015
  4. Sig

    Sig

    Again Bob, you didn't actually answer the guy's real question, which was based on his not understanding how AM opens happen. If you're trying to build a reputation, you're shooting yourself in the foot. I'd recommend you focus on half as many replies, but make those thoughtful, complete answers instead of just puking out something that's tangentially related. You often come across as an AI or Indian call center rep, pulling a canned answer from a script that matches a keyword in the question without actually understand what the question is. That's not you, but its how you come across, just so you know.
     
  5. Hm! I liked Bob's response. Concise, to the point, and with link to further info.
     
    Chubbly likes this.

  6. Wrong. He did answer the primary question. OP asked if settlement was at the open on Friday, to which rmorse confirmed. The remainder of this post is utter nonsense. I don't know rmorse personally, but I find his responses to be concise, relevant, and helpful. It is abundantly clear that he knows his stuff.

    To the OP -- As rmorse confirmed, SET is calculated at the open on Friday. However, the reason you got your email today regarding exercise is because actual exercise happens today on Saturday. I trade SPX options myself, and when I opened up my trading platform today several exercise/expiration confirmations popped up.
     
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  7. newwurldmn

    newwurldmn

    SPXPM and SPX weeklies seem like a tangential response to the OP's question. You come across as arrogant. Not saying that's you, but you come across that way. Just so you know.
     
    Chubbly likes this.
  8. Sig

    Sig

    So you really don't think the op was confused about the way that AM SPX options are settled? That seemed pretty clearly the question to me, hence his confusion on why the settle price was outside the actual index trading range, not when the email came or what the settlement symbol was. Maybe the original poster can shed some light on that though.
     
  9. Chubbly

    Chubbly


    [​IMG]
     
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  10. dave_s

    dave_s


    Actually the quote is not based on each stocks open. It is the SOQ for the stocks and the basket in the index.

    https://www.cmegroup.com/education/files/understanding-the-soq.pdf
     
    #10     Nov 22, 2015
    rmorse likes this.