n American-Style option seller (writer) may be assigned an exercise at any time until the option expires. This means that the option writer is subject to being assigned at any time after he or she has written the option until the option expires or until the option contract writer closes out his or her position by buying it back to close. Early exercise happens when the owner of a call or put invokes his or her rights before expiration. As the option seller, you have no control over assignment, and it is impossible to know exactly when this could happen. Generally, assignment risk becomes greater closer to expiration, however even with that being said, assignment can still happen at any time when trading American-Style Options…

For futures contracts that are settled by the actual physical delivery of the underlying commodity (physical delivery futures, which include products eligible and ineligible to trade at negative prices), account holders may not make or receive delivery of the underlying commodity. The exception is for the major CME currency futures (EUR, GBP, CHF, AUD, CAD, JPY, HKD)…

Overview:

There are two scenarios which could occur if a long option is taken to expiration. If the option is out-of-the-money at expiration and you do not choose to exercise it, the option will expire worthless, and your losses will consist of the premium that was paid to acquire the option. If the option is in-the-money at expiration by 0.01 or more, it will be automatically exercised on your behalf (unless you previously chose to lapse the option) by the Options Clearing Corporation (OCC). The OCC processes monthly expiration options on the third Saturday of the month, or the day after Friday expiration. The resulting long or short position will be put into the account, effective on the Friday trade date. If the account has sufficient margin to satisfy the requirement on the resulting position, it will then be up to the account holder to decide what they want to do with the position. If the resulting position causes a margin deficit, the account will be subject to liquidation at a time which is defined by the holdings within the account. Please be aware that any positions could be liquidated as a result of the account being in margin violation—the liquidation is not confined to only the shares that resulted from the option position. For example, if the account holds currency, futures, future options positions or and non-USD product, the account may begin to liquidate to meet the margin deficit as soon as a corresponding market opens…

If an option expires Out-of-the-Money, the Realized P&L can be found in the closing transaction line in the Trades section of your Activity Statement available in Client Portal. If an option is exercised or assigned into the underlying contract, the Unrealized P&L of the option becomes part of the Cost Basis of the delivered position and is found in the Cost Price in the Open Positions section of your Activity Statement. The Realized P&L of the option will then be included in the closing stock transaction's Realized P&L…

You should review your positions prior to expiration to determine whether you have adequate equity in your account to exercise your options. You should also determine whether you have adequate equity in the account if an in-the-money short option position is assigned to your account. You should also be aware that short options positions may be exercised against you by the long holder even if the option is out-of-the-money…

In the case of any stock option associated with a merger in which the underlying security has been converted to 100% cash after December 31, 2007, the OCC will accelerate its expiration. The new expiration date for such options will be accelerated to the nearest standard equity expiration, unless the cash conversion takes place after the Tuesday within an expiration week, in which case the expiration date for all contracts not already expiring that week will be deferred until the following month’s expiration…

Trader Workstation

To exercise or lapse an option in TWS:…

The account's cash value is updated as soon as IBKR receives and processes the official closing Index settlement value. In the Classic TWS Trade Log you will see the cash settled option closing transactions as an "AUTOEXERCISE" in the Action column with the time of the update from the OCC. If you click on the plus sign ("+") and expand the line you will see the dollar amount of the Credit/Debit in the Quantity column from the expired option…

VIEW TRADE CONFIRMATION REPORTS

You will get a notice of the option assignment sent to your Message Center and your Trade Confirmation report will have the closing option transactions and any resulting stock transactions in the Trades section,…

Spread positions can have unique expiration risks associated with them. In the case of U.S. securities options, the OCC will automatically exercise option contracts at expiration only if the option is In-the-Money by $0.01 or greater. If both legs of your expiring option spread are In-the-Money, then the long leg will be auto exercised by the OCC and the short may be assigned. It is possible that a short expiring option leg that finishes In-the-Money is lapsed by the owner and you will not be assigned. For non-U.S. options, please refer to the…

Weekly Class SPXW options are PM settled and expire on Friday, at 16:00 Eastern. There are monthly Class SPX options that stop trading on Thursday evening, and are settled to the opening on Friday. Those are the options that would expire on the 3rd Friday of the month…

When you sell an option, you provided the purchaser with the right to exercise which they generally will do if the option is in-the-money at expiration. While it is unlikely that holders of in-the-money long options will elect to let the option lapse without exercising them, certain holders may do so due to transaction costs or risk considerations. You can not force an assignment of your short option on the owner of the long option. Always review your position overnight as expiration stock and index option closing transactions will be in your…

If you are assigned on a short stock option at expiration that has a physically delivered underlying your account will take delivery of the stock. Remember that you cannot be both long and short the same contract in your IBKR account and all stock positions are netted out. Assignments are processed as a double random lottery and you will see any assigned stock in your account after IBKR’s overnight system update…

Any short American Style option can be assigned before it stops trading. Option assignments are a double random lottery, so you could get assigned on one or all of the open short American style options in your account before the short option expires. The earliest you would see an assignment to the account is after the IBKR system overnight refresh is completed sometime between midnight and 2 AM EST. Option assignments are processed overnight and…

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It is not possible to early exercise a Future Option using the Option Exercise Tool. In order to request an exercise, you must submit a written request via the Message Center…