If you have positions that are in the money, it's crucial that you monitor your account and communicate with Ally on Expiration. There are a few choices if you have positions that are expiring in the money:
- You can close the option position.
- You can leave the position open. However, if it's in the money, you must have sufficient buying power in the account to handle the exercise.
- You also have the ability to place a Do Not Exercise on long, in the money options. In this case, you will forfeit any remaining premium, but you will not incur the normal risk of taking a position over the weekend. In order to do this you must contact Ally on option expiration.
How to avoid risk
On expiration, Ally will monitor and take action on an account if there are not sufficient funds to cover a resulting position. This can include closing out your option position, entering a do not exercise or closing stock position in the after-hours market to cover any resulting position. If you do not wish to have your position closed, you must contact Ally with your intentions with the position and we will make a BEST EFFORT basis to comply with your wishes. Usually we will allow a client to take action in their own account by 3:30 pm Eastern, if we are alerted in a timely fashion.
If Ally has to take action above the normal course of action, we do charge a $100 options management charge in addition to the regular commission rate.
Also, if you are assigned or exercised on positions over the weekend that you do not have funds to cover, Ally may take action on Monday to close positions.