When I sell an option, the first thing I do is create a GTC "good to close" order to buy the option back at 50% of the sale price, just in case the price drops a lot while I'm away. Unless instructed otherwise, the OCC will automatically exercise any option that expires at least $0.01 ITM. Making even 10% in a month on a trade is pretty awesome return-wise, and usually it's a lot higher like 50% in 45 days. I regularly hold my short options until Friday pm unless the extrinsic value gets down to a few cents before Friday. Covered Call Writing and Expiring Options. Never assume it will expire worthless, it's worth the $1. Press question mark to learn the rest of the keyboard shortcuts. But wanted to get some perspective from your experience before I execute this strategy and see the numbers in real time. Options expire worthless. However, that mindset is a bit shortsighted. To protect your trading capital, close out your option trades and take your profit or loss before your options expire. Any option can be exercised at any time. What are you going to do now? That's why the premiums are so high. After all, if most of them will expire worthlessly, why not collect some money for them today while they still have value? The Greeks -- If if goes ITM a whole new set of rules apply. Current Plays and Ideas -- Even if you end up with short/long shares from assignment, you can just close the position. Overall, writing covered calls is a sound strategy for most investors, though not as valuable for short-term traders. The stock closes at $24.50 on expiration Friday . They automatically closed out my put credit spread before on a Friday afternoon at like 2;30 because the put I sold was close to being in the money. Heres an example from friday. One promoter who likes the idea of writing covered calls says, "Over 75% of all options held until expiration expire worthlessly...that's why you should do what the pros do and sell options to other people. Hi r/options community,. C. Long put is ITM, short put is ITM. The difference is how much time value is left on that Thursday. Since you mentioned rolling on Thursday to avoid assignment, I have one comment about assignment in general. If I know I am in for a satisfying profit, I buy to close. When in doubt, create some sort of reminder or alert to help ensure that you don't forget these expiration dates. more. Buying call options with the goal of owning the stock when the options expire is counterproductive. In this case, will the broker automatically credit my account for how much the bought option is worth on expiration? Sure, when traders buy a stock at $49, write calls with a $50 strike price, and the options expire with the stock price at $49, the strategy has worked about as well as can be expected and the traders are patting themselves on the back. Fees/commissions? Let’s say you own five ABC 25 puts at expiration. At around 3pm eastern, RH sells your spread at market price. Did you have enough cash to cover the assigned stock? Because your put is in the money, it is automatically exercised. If not, is it because of the particular stock you are selling CSPs for, your broker, or is it true in general? However, if that happens as the price of your underlying stock declines from your purchase price (for example, dropping from $49 to $41), that can't feel very good. You will not know if your option expired in or out of the money until late Friday morning or early afternoon when the settlement price is determined. If you own one call option with a 50-strike price and the stock closes at $50.03, your option is automatically exercised; come Monday morning, you now own 100 shares of stock.

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