HELP!

OptionsOptionsOptions said:
Could also be a negative diff. when the market opens on Monday - SPY lower than $266.
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If the market opens lower on Monday (which I doubt it unless Trump opens his mouth again), as long as he's LONG on the call, he won't lose anything; he just didn't profit when he could've if he had closed his position today when the market is above 266, above the strike on his call. Like I said before, he will only lose if he's SHORT on that call, then if someone else exercised against him, then he will have to deliver the shares because currently the market price is higher than the strike on his call. But if Monday comes and if the market drops, if he's SHORT the call, then it's even better. He would have nothing to worry about cuz he won't even get exercised against.

There is NO negative difference. SPY is NOT cash-settled.
 
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I'd like to see Robert Morse chime in on this one.
Frequently people play expiration games as an attempt to play with their broker's balance sheet and that is probably why you got a call from the help desk. People hide on expiration day. Your broker, to quote the OP - will liquidate your account. I would take them seriously.
If you can't be available near expiration or you don't have the money to exercise then don't expect them to let you trade options. SPY closed 56 cents in the money on your option. If it went unexercised you left $56 on the table and your position is gone.
If it go autoexercised you own SPY and if you can't support that trade they will sell it out at the open on Monday. If it opens higher you are hero - if it opens lower - pick a number - you own the difference and they warned you. If they need to liquidate some or all of your account you'll claim to be a victim.
IMHO never abandon an option that close to ATM - ask about a cabinet bid if there is no bid. Otherwise you are leaving your outcome to chance and they should consider liquidating you for that alone.
Now that there are weeklies I hear this story dozens of time an expiration cycle and half the time it's bullshit and somebody is trying to play with their broker's balance sheet.
I'll bet your story about today changes.
 
ajacobson++

If the option was ATM, then you don't even have the "liquidity" argument for not closing it. There's always bid/ask on an ATM option so you can close your position no matter what side you are.

In the absurd case there's no liquidity (not the case here, but on some thinly traded stocks it may happen), just short the underlier. You're long call so on exercise you'll get the underlier anyways. And you only need some 10% of the notional value as margin, that's about $2700 for SPY.

IB requires at least $10,000 in your account to let you trade options, so you definitely had the money.

On the future do either:
a) Close your option position.
b) Delta-hedge (short the underlier for a long call).
 
Aquarians said:
ajacobson++


IB requires at least $10,000 in your account to let you trade options, so you definitely had the money.
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Yeah, I thought I had enough, too - $8k in available margin, but the system cock-blocked me when I tried to short it for not enough margin. I don't think margin is 10% - I think it's 30% (I'm in Canada).

I had a market sell order set to trigger at 10 minutes to close in case I didn't get to the comp in time, so I don't know what happened with that.
I was playing it careful - it was only one contract.
 
The 100% safe method, for a $10k account, is to only trade options on assets priced lower than the theoretical limit of $100. I, personally have set it to $90 (I've got such a $10k account). I did get "accidental" expirations on occasion but always on my own balance sheet.
 
"I had a market sell order set to trigger at 10 minutes to close in case I didn't get to the comp in time, so I don't know what happened with that.
I was playing it careful - it was only one contract."

Again as predicted the plot changes.
 
The best story I ever heard was I couldn't close a position because I was at my monthly data cap. Of course that trade turned and resulted in a fabulous profit :D.
 
tommcginnis said:
"Find-a-friend"
and wire the money.
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When you're down and troubled
And you need some love and care
And nothing, nothing is going right
Close your eyes and think of me
And soon I will be there
To brighten up even your darkest night
You just call out my name
And you know wherever I am
I'll come running
To see you again
Winter, spring, summer, or fall
All you have to do is call
 
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?
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It's a little late for this info but you should either close the option during trading hours or instruct IB not to exercise.

https://www.interactivebrokers.com/...glossary/exercise_by_exception_processing.htm
 
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