Normal
I'm not sure what happens on the ASX, but in the US, if the option is in the money by a certain amount (i.e. 25c) the option is automatically exercised, unless you specify for it not to be. If no exercise, you will lose the intrinsic value of the option. So be sure to know the mechanics of this.As a rule, I almost always close out long options before expiry, unless I particularly want the shares (almost never). This is the most efficient way to capture intrinsic value, as once the option is exercised, you are exposed to unlimited risk via the share.Only cash settled options (such as index options) will be settled in cash on expiry.
I'm not sure what happens on the ASX, but in the US, if the option is in the money by a certain amount (i.e. 25c) the option is automatically exercised, unless you specify for it not to be. If no exercise, you will lose the intrinsic value of the option. So be sure to know the mechanics of this.
As a rule, I almost always close out long options before expiry, unless I particularly want the shares (almost never). This is the most efficient way to capture intrinsic value, as once the option is exercised, you are exposed to unlimited risk via the share.
Only cash settled options (such as index options) will be settled in cash on expiry.
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