My ITM short option was not assigned

[jerron]

Last week in my portfolio there were 10 ITM options expired this weekend with strike price 455. The close price was 457.62. I expected it would result in 1000 stocks sold. So I purchased stocks back after the regular trade hours to maintain delta neutral. But today I found the options were not assigned and now my portfolio are bullish. I understand that the short option assignment were relying on the other party's decision, no matter how deep they were in the money. My questions are:

1. How soon can we know if the option would be assigned or not (my broker is IB)?
2. How do we usually manage such uncertainty of option assignment?

Thanks!

 

[Drawdown Addict]

It depends on the type of the option.

https://www.cmegroup.com/education/...rence-european-vs-american-style-options.html

This article does a good job of explaining exercise times.

 

[traider]

Last week in my portfolio there were 10 ITM options expired this weekend with strike price 455. The close price was 457.62. I expected it would result in 1000 stocks sold. So I purchased stocks back after the regular trade hours to maintain delta neutral. But today I found the options were not assigned and now my portfolio are bullish. I understand that the short option assignment were relying on the other party's decision, no matter how deep they were in the money. My questions are:

1. How soon can we know if the option would be assigned or not (my broker is IB)?
2. How do we usually manage such uncertainty of option assignment?

Thanks!

If you need certainty you have to close your short options by trading out

 

[destriero]

Last week in my portfolio there were 10 ITM options expired this weekend with strike price 455. The close price was 457.62. I expected it would result in 1000 stocks sold. So I purchased stocks back after the regular trade hours to maintain delta neutral. But today I found the options were not assigned and now my portfolio are bullish. I understand that the short option assignment were relying on the other party's decision, no matter how deep they were in the money. My questions are:

1. How soon can we know if the option would be assigned or not (my broker is IB)?
2. How do we usually manage such uncertainty of option assignment?

Thanks!

You will be assigned on the NVDA 10-lot.

 

[ajacobson]

Your firm gets two OCC memos. One on the 6th with special pricing consideration and another on the 7th with firm-by-firm exercise/assignment. If they are around and all will be around on Saturday. Call them. Autoex should have hit you and I would be more concerned with leaving all most $3000 on the table - assuming you and your firm did nothing. Next time trade out prior to the close or exercise and buy the stock at strike.

 

[OptionsOptionsOptions]

I would be more concerned with leaving all most $3000 on the table.....

No money was left on the table. The almost $3,000 is a negative amount subtracted from the premium collected on the short call options, which expired ITM.

 

[SunTrader]

You will be assigned on the NVDA 10-lot.

Sniffed that one out did ya.

 

[jerron]

It depends on the type of the option.

https://www.cmegroup.com/education/...rence-european-vs-american-style-options.html

This article does a good job of explaining exercise times.

I guess I mentioned the options were expired last weekend.

 

[jerron]

Your firm gets two OCC memos. One on the 6th with special pricing consideration and another on the 7th with firm-by-firm exercise/assignment. If they are around and all will be around on Saturday. Call them. Autoex should have hit you and I would be more concerned with leaving all most $3000 on the table - assuming you and your firm did nothing. Next time trade out prior to the close or exercise and buy the stock at strike.

What is "special pricing consideration"? So no one would be able to tell until 7th? What am I supposed to say when I Call them? Thanks!

 

[ajacobson]

OCC Expiration Memo - October 6, 2023
External

no-reply@theocc.com <no-reply@theocc.com>
Oct 6, 2023, 10:18 AM

to me

The following information memo was posted Friday, October 6, 2023:

Memo#: 53328
Title: DHR1 Options - Expiration Pricing Consideration
Search for more information memos on the OCC at https://infomemo.theocc.com/infomemo/search

Visit our website at https://www.theocc.com




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This is what a Special pricing memo looks like. They are free - just go to theocc site and register. Exercise/Assignment memos go to the member firms and they should be there on the days after expiration. They hit about 10 AM Central. Your firm also gets a contrary exercise memo - for normal settlement - a couple of days before. This serves as an expected exercise/assignment notification. Make your own judgments about your brokerage relationship.