For the last option cycle i sold a 35$ covered call for a . Close of day the stock was exactly at the 35$ and the option was listed at .01 I saw it at 4.30 pm on options close day. On sunday 90% of my options were exercised meaning the stock got sold. I have following questions. 1> Why would ATM option exercise? 2> Could i have done anything @ 4.30 when the option ended ATM
1. Someone who was long the option found themselves short stock and excercised to flatten their position for Monday. 2. No.
Also, if the call traded below parity during the day, you could have caught the random assignment. Doesn't matter where it closed.
It met auto exercise threshold. That means unless the person long that call position notified the broker to send a do not exercise notice to the OCC for the long call position, they would have automatically received stock due to auto exercise. Obviously there were enough explicit instructions sent out to the OCC since only 90% of your position got called away on assignment. But there were plenty more who chose to exercise. Next time if you want to insure this does not happen, you need to close your short position before the market closes.
you got pinned. if it's close like that and you don't want to worry about it you should always close out. luckily it was a covered call and not a position that left you short a stock that gapped up on Monday or long something that fell of a cliff over the weekend.