If I bought a put option in a cash account, it expired ITM and was exercised automatically on Friday, could I use the proceeds on Monday or would I have to wait T+2 working days until Wednesday for settlement?

  • 1
    Friday + 2 = Tuesday. – Aganju May 21 at 22:14

Since it's a cash account, my assumption is that you own the stock and that when the long put is exercised, you sell the stock. The proceeds will not be available for two days since settlement is T+2.

If you don't own the stock, Houston, we have a problem (shorting in a cash account).

  • You wait till Tuesday (Friday + 2), and buy the shares back (closing the short position). You'd have to potentially pay some cents for the borrowing of the shares. – Aganju May 21 at 22:16
  • A short equity position in a cash account is a violation. In addition, you don't have to wait until Tuesday to BTC the shares and nor should you because once assigned, you'll have significant directional risk that you did not have with only a long put. All ITM options should be closed by expiration unless you actually want the position in the underlying. – Bob Baerker May 21 at 22:57

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