What will happen on the options expiration date?

As the expiration date of your option contract nears, there are a few important things to keep in mind:

If your option is In-The-Money (ITM) by $.01 or more at market close:

  • It will be automatically exercised by the OCC after the market close on the expiration date if there is sufficient buying power in your account.

  • If there is not sufficient buying power in your account to support an exercise, you may sell the ITM options to collect the premium. If you do not act prior to 3 hours before market close on the contract expiration date, Redbridge reserves the right to take any action it deems necessary to mitigate risk without notice including, but not limited to, closing the contracts in the open market on your behalf, submitting Do Not Exercise Requests, preventing exercise of the contract(s) that your account cannot support. Any action taken by Redbridge will be on a best-efforts basis and no action is guaranteed. Market or limit orders may be placed by Redbridge which could result in orders being filled at less than favorable pricing, or orders not executing at all.

If your option contract is out-of-the-money at the market close:

  • Your option contract(s) will automatically expire worthless and no action is required.

You are responsible for monitoring your account and are responsible for losses incurred from options activity (including any actions taken by Redbridge). Options trading entails significant risk and is not appropriate for all investors.