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Why can't I wait until the last minute before close of trading on expiration day to sell an ITM call option I am long? Why must the broker sell it 1 hour before close? What is the risk to the broker if it expires in my account ITM without being exercised? I thought an option gives you the right to exercise if you want. I did not know the broker can force sell an ITM option for you. I missed out on 30% because I was force sold at 345pm. At 355pm, the option moved up 30%. Thanks.

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There is no guarantee that your order will be filled after 3:55pm. If it’s not filled, the only way to get back the intrinsic value is to exercise the option. However, this may involve very large transactions, since in order to exercise your call options, you need to buy 100 shares for each contract. You may end up buying on margin and if every one does so at the same moment, the broker suffers from a high risk if the share price fluctuates after-hours.

That said, I think the behaviour is broker-specific. I suggest notifying the broker in advance if you don’t want to exercise or sell it.

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    You might not like the price but the market maker will fill the order at 3:55 PM or later.
    – Bob Baerker
    Dec 4, 2022 at 1:56

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