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Automatic exercise |
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Automatic exercise A protection procedure whereby the Options Clearing Corporation attempts to protect the holder of an expiring in-the-money option by automatically exercising the option on behalf of the holder.
Automatic exercise. If you hold a call option, automatic exercise may occur if the contract is in-the-money by a certain amount. In this case, an in-the-money contract is one where the strike price -- the price at which you would purchase the underlying instrument if the contract were exercised -- is lower than the market price of that instrument. Generally speaking, exercising your option in this situation would produce a profit on the transaction. Certain options may be subject to automatic exercise authorized by the Options Clearing Corporation (OCC) unless you instruct them otherwise. Your brokerage firm may also have an automatic exercise policy. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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23) In most other unitary jurisdictions, the concept is not one of discretion, but rather of automatic exercise once the applicable tests are met. 00 per common share for a period of 24 months, subject to a forced exercise provision whereby Titan can call the automatic exercise of the warrants should Titan's common shares trade on the Exchange at a price of $4. One other interesting tidbit to keep in mind is a new rule that requires the automatic exercise of options that are slightly in-the-money when they expire. |
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