Biogen halted, options expiring today.

No true..Dude was short put spread in TSLA,stock dropped after hours,got assigned on the short put and for some reason no auto exercise on the long put..Guy came in long 500 shares of that beast

zdreg said:
He did not blow up. quote spreads eroded the profitability of his position.
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If you read what he wrote,both puts ended up being in the money..Trader was asleep at the wheel....

What I am not sure of is if there is,Auto exercise if an OTM expiring option goes ITM after hours,before 5:30...FWIW, institutions,get a longer look(accordi g to my broker)
 
taowave said:
What I am not sure of is if there is,Auto exercise if an OTM expiring option goes ITM after hours,before 5:30...FWIW, institutions,get a longer look(accordi g to my broker)
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You get an extra hour to OCC deadline (IIRC), I could check with my prime on Monday. It's not like the institutions never fuck up exercise instructions, e.g. BAML lost some serious 8-digits a few years ago on an early exercise arbitrage trade (yup, "awesome").

PS. this is why I have been historically reluctant to play with single name options, despite all the opportunities
 
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Same Lazy Element said:
You get an extra hour to OCC deadline (IIRC), I could check with my prime on Monday. It's not like the institutions never fuck up exercise instructions, e.g. BAML lost some serious 8-digits a few years ago on an early exercise arbitrage trade (yup, "awesome").

PS. this is why I have been historically reluctant to play with single name options, despite all the opportunities
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BAML lost it on SPY's right?
 
taowave said:
Just out of curiousity,anyone have an automatic buy to close the short penny options ??
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I did a study on closing all my nickel options vs losing $10/share on a Friday gap. The break even was like every 10 months for an event to happen. I’ve experienced a total of 3 in 13 years.
 
Were you trading firm capital??

I find that under portfolio margin,if you dont manage your pennies,the margin explodes on you and instead of looking to put shit on that makes real money, you are left scrambling to get under margin...

Not too mention the nastygram I get from my broker...
 
qlai said:
Forgive me if it’s obvious, but how did he blow up? He was long stock and long puts. Broker liquidates stock and books the loss. Then the stock goes up without him and the long puts expire worthless?
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His long puts were OTM at expiration, so no auto-exercise. Then the stock went down in after hours session. The owner of his short puts (the short leg of his spread) was on the ball and exercised during AH. The guy could have exercised his puts (the long leg of his spread), but he wasn't watching the stock AH, apparently. He only got notice of the short put assignment like at 6:30 or something, so it was too late to take action.
 
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taowave said:
Doesn't make sense..Trader had an ITM put after TSLA traded lower in AH and no automatic exercise???
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As far as I know, auto exercise only happens if the option is one penny or more ITM at official (day session) close. If you want to exercise OTM ops in AH you have to manually do it. This guy's long options were a little bit OTM at official close.
 
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