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Change to options trading
originally posted: 11/22/2006
reposted: 2/18/2011 This post has not
been recently reviewed or revised by the author and may be out of date.
If you notice an error or are in doubt, please send a new question by
email or ask for an update. Email asktony@tonynovak.com.
Q: I received a message about a
change to stock option expirations. What does it mean?
A: The Options Clearing
Corporation (OCC) will now exercise expiring stock options that are
worth at least $.05 The previous threshold was $0.25 (except for index
options that remain at $.01) This is good news for investors who might
otherwise miss receiving a small profit when the option expires
worthless. The automatic execution will result in a deposit of the
funds directly into your account. Investors can opt out of this program
by notifying their brokerage firm. Keep in mind though, that the profit
on 1000 shares on a $.05 movement is only $50, less commission. So this
is not really a big deal for most investors.
Summary
More resources:
www.wealthmanagement.us.com
