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Options beginner here. Cannot wrap my head around this. Say I’m trading a long iron condor and the call spread ends up in the money on expiration. Now I can exercise the long call. So should I wait for the other party to exercise the short call? Or should I wait for the short call to be exercised first before exercising the long call? I don’t wanna just exercise one leg and risk the other leg not being exercised. How does it work ? Thanks.

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    You can just sell the whole thing to close your position.
    – ApplePie
    May 12 at 18:47
  • If the short call is in-the-money and they don't exercise, that's good for you. It means that you can sell the underlying at a higher price than the strike.
    – D Stanley
    May 12 at 18:54
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    @D Stanley - While it may be good for him if he exercises his long call and the short call expires, it can also be very bad should the underlying tank before trading resumes Monday morning (assuming that it's Friday expiration). The entire idea behind an iron condor is defined risk and reward. May 12 at 19:07
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Exercising your long call would tie up the additional cash needed to buy the security. It would also expose you to directional risk if the underlying cratered.

The OCC exercises all options that are ITM at expiration unless the contract owner informs the OCC via his broker not to exercise. Therefore, the entire process will be automatic if both legs are ITM at expiration.

If it's some time before expiration and both legs are deep ITM and the call spread is trading for close to its intrinsic value, you could use a combo order to close it. That would end all involvement, release the value, increasing your cash balance.

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