exact expiration time

T

theboringguy

I have a question here. For example, I hv sold a 155 put option, at the third week friday,and at 5:30pm, the stock price is 155.10. However, during after market hours, the stock price drop to 145.00.

I would like to know that in this case, will I earn the premium of selling, or will I be losing money? Thank you.
 
i think contrary intents have to be stated by 5:30pm. So in your example you would probably be okay. But given it's proximity to the the strike price someone may exercise against you as a risk mitigation tactic.
 
Quote from ferrycorsten:

You keep the premium. The stock needs to close under 150 in order to have the stock put to you. After hours pricing is immaterial.
More...

umm are you sure? don't premium buyers have until 5:30 pm est on the day of expiry to exercise.

i know of one famous case of a company received a buyout bid right after the market closed on expiry day (like at 4:02 pm est). well guess what the buyers of otm calls did? yep they exercised them and blew up all the sellers who thought they kept the premium.

i'm not saying this will happen alot just be damned sure you know exactly what you're getting into.
 
Quote from ferrycorsten:

You keep the premium. The stock needs to close under 150 in order to have the stock put to you. After hours pricing is immaterial.
More...

As others have said, the cutoff time for contrary exercise advice to the OCC is 5:30est. Brokers generally have an earlier time limit. After hours trading is very important.
 
You must log in or register to reply here.
Back
Top