What Is the Process of Automatic Exercise at Expiration? ⎊ Path

What Is the Process of Automatic Exercise at Expiration?

Automatic exercise occurs when an option is In-The-Money (ITM) by a predetermined minimum amount at expiration. The clearing house automatically exercises the option on behalf of the holder unless they submit contrary instructions.

This is a safety measure to prevent value loss.

What Is the Formula for Calculating the Intrinsic Value of an ITM Put Option?

What Mechanism Ensures a Flash Loan Is Repaid within One Transaction?

How Does Being ITM Affect the Likelihood of an Option Being Exercised?

What Is the Difference between an American and European Style Option in Terms of Exercise?

How Do Options Exchanges Handle Automatic Exercise for Expiring Options?

What Is the Difference between an ‘In-the-Money’ and ‘Out-of-the-Money’ Option?

What Is the Difference between American-Style and European-Style Options Exercise?

What Happens to the ITM Option at Expiration If It Is Not Exercised?

Glossar

Automatic Exercise

Execution ⎊ Automatic Exercise is the predetermined, non-discretionary activation of an option contract's embedded right to buy or sell the underlying asset at the strike price.