automatic exercise (redirected from Automatic exercising)

Automatic Exercise

A procedure implemented to protect an option holder where the Option Clearing Corporation will automatically exercise an "in the money" option for the holder.

Notes:

Think of it as an insurance policy for those who aren't as tuned in with the 3rd Friday of every month.

See also: Expiration Date, In the Money, Option, Out of the Money, Strike Price

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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.

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automatic exercise

Exercise of an in-the-money option following expiration unless the holder issues instructions to the contrary.