HELP!

misterkel

misterkel

I have kind of an emergency. I am long a SPY call in the money, expires 4/27 (today). The account is small and the rep at IB says if I don't have the margin, they will liquidate my entire account - which is absurd.
What is the outcome? Should I just let the options lapse?
 
I assume:

  • The 266.50 Call.
  • Auto-exercise on Saturday - then IB will liquidate the shares on Monday due to lack of funds.
  • The loss or profit will be the difference of $266.50 and the price SPY is sold for on Monday.
 
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"Find-a-friend"
and
wire the money.

You've got the weekend.
Wires (used to be) instantly available.

Keep IB apprised.

GOOD LUCK.

And very much, DO let us know how you make out.
 
Well, it was the 266 and only one call, so I let it lapse. Not a big loss, but annoying to lose it that way. live and learn.
 
I’m lost how does a ITM option lapse? Isn’t ITM automatically exercised? Hence the reason IB would’ve liquidated you had enough capital for the contract but not the underlying. Any ITM position still has intrinsic value. By my calculation your option has an IV of 56.00 and IB is going to auto exercise so you’ll be delivered shares of SPY, then they’ll liquidated for you. Sorry I’m late to the thread but in the future close(sell) the position before market closes, if you’re not interested in the delivery of shares.
 
misterkel said:
I have kind of an emergency. I am long a SPY call in the money, expires 4/27 (today). The account is small and the rep at IB says if I don't have the margin, they will liquidate my entire account - which is absurd.
What is the outcome? Should I just let the options lapse?
More...

If you are long the call and it's in the money, if you don't tell them not to exercise, OCC will auto-exercise this call on you and you would end up with the SPY shares. If you sell the call, you will make a profit. If you let the option elapse unexercised, you will just get nothing. If your call is not in the money, you will just get nothing. No matter what happens, as long as you are long a call, nothing will happen to you. How can the broker margin call you let alone liquidate your account? Your position is in the same direction of the market.

Are you SURE you are LONG the call?
 
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JSOP said:
If you are long the call and it's in the money, if you don't tell them not to exercise, OCC will auto-exercise this call on you and you would be paid the positive diff..
More...


Could also be a negative diff. when the market opens on Monday - SPY lower than $266.
 
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