The rule of U.S. stock option forced liquidation
|
Option type |
Explanation of the forced liquidation rules on expiration day |
|
long call |
The system will continuously monitor the client's account positions and calculate the margin required for exercise from time to time (usually 1 hour before the market close). If the option is in-the-money or out-of-the-money, as long as the price difference is less than 5%, and the exercise margin is insufficient, uSmart will reserve the right to close the end-of-day options at any time and conduct forced liquidation. |
|
long put |
The system will continuously monitor the client's account positions and calculate the margin required for exercise from time to time (usually 1 hour before the market close). If the option is in-the-money or out-of-the-money, as long as the price difference is less than 5%, and the exercise margin is insufficient, uSmart will reserve the right to close the end-of-day options at any time and conduct forced liquidation. |
|
short call
|
Naked Call Option Selling: The system will continuously monitor the client's account positions and calculate the margin required for exercise from time to time (usually 1 hour before the market close). If the option is in-the-money or out-of-the-money, as long as the price difference is less than 5%, and the exercise margin is insufficient, uSmart will reserve the right to close the end-of-day options at any time and the position need to be bought for liquidation. |
|
Covered Call: Support exercise if in price, auto invalid if out price |
|
|
short put |
The system will continuously monitor the client's account positions and calculate the margin required for exercise from time to time (usually 1 hour before the market close). If the option is in-the-money or out-of-the-money, as long as the price difference is less than 5%, and the passive exercise margin amount is insufficient, uSMART will reserve the right to close the end-of-day options at any time and the position need to be bought for liquidation. |
