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This is called "exercise by exception". A broker or holder of such options may request that they not be exercised by exception. The price of the underlying security used to determine the need for exercise by exception is the price of the regular-hours trade reported last to the OCC at or before 4:01:30 pm ET on the day before expiration.
The call owner can exercise the option, putting up cash to buy the stock at the strike price. Or the owner can simply sell the option at its fair market value to another buyer before it expires.
Typically, the holder can exercise the option at quarterly dates, but not before a set time period (typically one year) has elapsed. The ability to exercise the option ends prior to the maturity date of the product. The term was coined by Keith Kline, who at the time was an agency fixed income trader at the Bank of New York.
In finance, the expiration date of an option contract (represented by Greek letter tau, τ) is the last date on which the holder of the option may exercise it according to its terms. [1] In the case of options with "automatic exercise", the net value of the option is credited to the long and debited to the short position holders.
11 Foods You Should Never Eat Past Their Expiration Date The dietitians emphasize that while food is sometimes still good past its expiration date, you should absolutely always exercise caution.
In this market, the last available price of the underlier, which is used to determine whether an option is automatically exercised, is the price of the regular-hours trade reported last to the Options Clearing Corporation at or before 4:01:30 pm ET on the Friday before expiration. This trade will have occurred during normal hours, i.e. before 4 ...
The FDA has a list online of authorized home COVID-19 tests, along with links to “updated expiration dates” so you can check to see if your test’s expiration date has been extended.
For an out-of-the-money option, the further in the future the expiration date—i.e. the longer the time to exercise—the higher the chance of this occurring, and thus the higher the option price; for an in-the-money option the chance of being in the money decreases; however the fact that the option cannot have negative value also works in the ...