We’ll automatically deduct the dividend amount from your account, even if it causes you to have a negative balance. In this example, you’ll owe $1.00 x 100 shares = $100. In this case, you’ll have to deliver the underlying shares and pay the counterparty the dividend that is associated with these shares. If you’re short, or you’ve sold 1 option call contract for XYZ expiring on or after October 1, there is a risk that you could be assigned.įor example, if you get assigned on September 30, you would have a short position of the 100 shares that were exercised by the counterparty (a person who bought and exercised the call option) when the market opens on October 1. XYZ will pay out the following dividend in the future: You can view your expired contracts in your account history. Once your contract expires, we’ll remove it from your home screen. If both legs are out of the money (and they aren’t at risk of being in the money at expiration), we typically won’t take action and both options should expire worthless.To avoid this, you can close the position prior to the last thirty minutes of trading (before 3:30PM ET on normal trading days). only one leg is in the money or at risk of being in the money), we may attempt to close the entire spread (including the leg that is out of the money). If the spread is partially in the money or close to being partially in the money (i.e.The short leg may be assigned, and the long leg may be exercised to offset the assignment. If both legs are in the money (and neither leg is at risk of being out of the money at expiration).Also, options rolling is only available in margin accounts. Keep in mind that options rolling involves simultaneously closing a position (realizing any gains or losses) and opening a new one. To avoid this, you can close the position or roll it to a later date prior to the last thirty minutes of trading (before 3:30PM ET on normal trading days). For example, if you have 10 contracts and own 500 shares, we will attempt to sell 5 contracts and allow the remaining 5 contracts to be exercised, which would result in 500 shares sold from your brokerage account. If you don’t have enough of the underlying shares, we may attempt to sell the option.If the contract is in the money (or at risk of being in the money), we’ll review your account to see if you have enough of the underlying shares to sell.For example, if you have 10 contracts, but only enough buying power to purchase 500 shares, we may attempt to sell 5 contracts and allow 5 contracts to be exercised for a total of 500 shares. If you don’t have enough buying power to purchase the underlying shares, we may attempt to sell the option.If the contract is in the money (or at risk of being in the money), we’ll review your account to see if you have enough buying power to purchase the underlying shares.The cut-off time for submitting a Do-Not-Exercise request is 5 PM ET.You have asked Robinhood to submit a Do-Not-Exercise request on your behalf. The exercise would result in a short stock position.You don’t have sufficient buying power.If your option is in the money at the close, Robinhood will attempt to exercise it for you at expiration unless: Robinhood’s risk checks are designed to close positions which accounts cannot support and take into consideration the value of a position, the implied risk, and the customer’s current balance, among other things.If you don’t have enough buying power or underlying shares to exercise your option, we may attempt to sell the contract in the market for you within the last thirty minutes before the market closes on the options' expiration date. Keep in mind that managing your options positions, including taking proactive steps to mitigate risk, is ultimately your responsibility.
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