You are correct the auto exercise was .25 and I should have had all my facts before I gave the example; had to look it up but the actually date was june 17 2005 and the actually option was the 280 calls when this happened to me. But my point is still valid for anybody that is interested in...
I will give you a example that happen to me a couple of years ago. I was long some google calls on friday expiration that were trading just below the strike. For example reasons lets say the strike was 450 and the stock was trading 449.25 to 449.80 in the last ten minutes of the day. I bought...
I think this guy came in to your office and took a picture for himself of your setup.
http://www.traderscoach.com/about_us_photo_album.php
about 14 pics down.
I also believe one of the reasons for the inflated price is how hard the stock is to borrow. With a rate near 100%, which the puts reflect in their price, and the fact that there are street side and firm buy ins everyday keeps the price up here.
The most your option will be worth is one dollar if GM goes to zero. If GM went to .47 on the day of expiration of which ever month you purchased you would break even. But if GM goes to .47 tomorrow you would make some money because there would be some time value left in the option.
it took about a week and a half to deliver but it is because it comes directly from chief in MN.
http://www.thenerds.net/CHIEF_MANUFACTURING.Dbl_Horiz_Triple_Array_Blk_Grommet_Mnt.KTG330B.html?affid=1&affid=2&srccode=cii_5784816&cpncode=12-67150327-2
Just look what happen to all those people last expiration when the fed cut the discount rate on friday before the open. The settlement price of the S&P 500 for all options is the price of friday's open. Alot of people got burned selling otm calls thursday before the close.