OptionAutomator Options Trading Glossary:

Definition, Examples & Resources:Automatic Exercise'

« Back to the Options Trading Glossary

What is Automatic Exercise in Options Trading ?

Automatic Exercise
The exercise of an in-the-money option by the clearing firm (Options Clearing Corporation) as a measure of protection for the holder of the expiring option. It can be compared to an insurance policy for the option holder. Sometimes an option holder may not be consistently monitoring his options. In this the Options Clearing Corporation will exercise the option and this way the option holder can still benefit from profits.

Thanks for sharing. Connect with us on social media for additional content!

Send this to a friend

Hi, this may be interesting you: Automatic Exercise! This is the link: https://www.optionautomator.com/Options-Trading-Glossary/automatic-exercise/