if I sell ITM csp expiring next friday - do I get immediately exercised?

klattermusen

klattermusen

hi...

if I sell ITM puts (cash secured) expiring next friday - do I get immediately exercised? If not when?

Also ..same question but with selling puts ITM today - do they exercise immediately or last minute trading day?

thanks
 
NO... not immediately...
But they CAN be exercised b4 expiry and you would have to deliver
On expiry ... YES if expired ITM
 
I use TDA/ThinkOrSwim option scanner (called "Option Hacker"), which is free. I didn't see exactly a way to select only weeklies, but you can set "days to expiration" as your criteria, thus catching both monthly and weekly options expiring within a week or so.
 
If a stock is at $40 and you have sold the option for $35 and the price of the option is at $5.5, the exerciser would be stupid to exercise his options because he would lose $0.5. In general, it will never happen. It won't even happen in your account on the expiry date. It will happen on next day. He can exercise anytime but he won't.
 
Just to add clarification, I guess you did not mean that if the option is exercised prior to expiration that the underlying has to be delivered on expiry? Because the underlying must be delivered immediately and settles at t(now) +n, subject to settlement conventions for each market/asset class.

Justrade said:
NO... not immediately...
But they CAN be exercised b4 expiry and you would have to deliver
On expiry ... YES if expired ITM
More...
 
DiceAreCast said:
Just to add clarification, I guess you did not mean that if the option is exercised prior to expiration that the underlying has to be delivered on expiry? Because the underlying must be delivered immediately and settles at t(now) +n, subject to settlement conventions for each market/asset class.
More...


Clarification noted and as hajimow said NO ONE should be exercising it before expiry
 
You must log in or register to reply here.
Back
Top