Close expired option?

oraclewizard77

oraclewizard77

In IB, I had a covered call option contract on RMBS that expired in the money. I forgot to close out my position today. I do have 200 shares of the stock long, and this 1 contract short.

I went in and placed a GTC close limit order for the stock and the option, but of course its after hours, and I will not get filled till possibly Friday.

I can not call IB, since they are closed. Am I right in placing this order to close out the position for both the stock and the option, or will IB automatically close it out for me on Money for example will they close out the long stock and the short option or just the option?

Also, if for example, I had instead sold a call option naked, and forgot to close it out, what would happen?

My plan was to close the option postion and sell the stock when all time premium had expired, but basically just forgot about the position till it was too late.
 
100 shares will be sold automatically from your account if you have CC expiring ITM.

If it's a naked call expiring ITM, the broker will withdraw money from your account to cover the cost of 100 shares.
 
Ok, I canceled out my limit orders and will see what happens Monday.

Thanks

Quote from turkeyneck:

100 shares will be sold automatically from your account if you have CC expiring ITM.

If it's a naked call expiring ITM, the broker will withdraw money from your account to cover the cost of 100 shares.
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Quote from oraclewizard77:

Ok, I canceled out my limit orders and will see what happens Monday.

Thanks
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IB will NOT close it out for you. IB has nothing to do with the process.

The OCC will issue an exercise notice.

Your account will be assigned that exercise notice.

As a result, you sell 100 shares of stock and receive the strike price per share.

You do not have to wait until Monday. IB will have the information for you on Sunday - if you access your account online.

It was wrong to enter an order to exit the trade. The exercsie process is automatic when the call is ITM - and IB charges zero fee to complete that process.

If you sell the stock and buy the call, you pay two commissions.

Mark
 
Quote from oraclewizard77:

Also, if for example, I had instead sold a call option naked, and forgot to close it out, what would happen?
More...
Assuming it was ITM and exercisd, Monday AM you'd be short 100 shares. Again, assuming it's your error and you don't want the short postion, best to deal with it early before regular trading starts.
 
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