I ask because suppose you don't manually exercise and expiration day hits and it's in the money..do you lose it all or is the in the money gain automatically credited to your account?

  • 10
    Have you tried asking etrade? Apr 18 '12 at 16:27

There are a number of choices:

  • The broker can execute and immediately buy the stock to close the position
  • The Put gets executed and you wake up Monday to a short position and possibly a margin call
  • The put was not sufficiently in the money for either of the above to occur automatically.

I prefer Dilip's response "Have you tried asking etrade?" No offense, but questions about how a particular broker handles certain situations are best asked of the broker.

Last - one should never enter into any trade (especially options trades) without understanding the process in advance. I hope you are asking this before trading.


I have held an in the money long position on an option into expiration, on etrade, and nothing happened. (Scalping expiring options - high risk)

The option expired a penny or two ITM, and was not worth exercising, nor did I have the purchasing power to exercise it. (AAPL)

From etrade's website:

Here are a few things to keep in mind about exercises and assignments:

Equity options $0.01 or more in the money will be automatically exercised for you unless you instruct us not to exercise them. For example, a September $25 call will be automatically exercised if the underlying security's closing price is $25.01 or higher at expiration. If the closing price is below $25.01, you would need to call an E*TRADE Securities broker at 1-800-ETRADE-1 with specific instructions for exercising the option. You would also need to call an E*TRADE Securities broker if the closing price is higher than $25.01 at expiration and you do not wish to exercise the call option. Index options $0.01 or more in the money will be automatically exercised for you unless you instruct us not to exercise them. Options that are out of the money will expire worthless. You may request to exercise American style options anytime prior to expiration. A request not to exercise options may be made only on the last trading day prior to expiration. If you'd like to exercise options or submit do-not-exercise instructions, call an E*TRADE Securities broker at 1-800-ETRADE-1. You won't be charged our normal fee for broker-assisted trades, but the regular options commission will apply. Requests are processed on a best-efforts basis.

When equity options are exercised or assigned, you'll receive a Smart Alert message letting you know. You can also check View Orders to see which stock you bought or sold, the number of shares, and the strike price.

Notes: If you do not have sufficient purchasing power in your account to accept the assignment or exercise, your expiring options positions may be closed, without notification, on the last trading day for the specific options series. Additionally, if your expiring position is not closed and you do not have sufficient purchasing power, E*TRADE Securities may submit do-not-exercise instructions without notification. Find out more about options expiration dates.

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