How do I submit exercise requests for long options? (US options and futures)
An exercise request is an instruction from the holder of an option to their brokerage to exercise the rights granted by an options contract. You can submit exercise requests to realise the intrinsic value of your options, either to secure profits, hedge other positions, receive a dividend, and more. Please consider the following details before submitting an exercise request.
Were you assigned early on a spread?
Were you assigned early on a spread and want to exercise your long leg? A covered stock order could be more favorable than an exercise request. If you were assigned early on a spread and your long leg expires today, the long option will auto-exercise as long as it expires $0.01 or more ITM. Additionally, you may perform a covered stock order to get rid of the assignment.
Can your account handle the exercise?
Please note that your account must have enough buying power to handle an early exercise request. For example, if you have a $500 cash or margin account and you are long a $50-strike call, then you would not be able to submit an early exercise request. Although you could purchase a call, an early exercise request would convert the long $50-strike call into $5,000 worth of stock. Your only option would be to sell the call. However, if your account has sufficient buying power, then you may submit an exercise request.
How do I submit an exercise request?
If the option has not yet expired, you can request to exercise it by contacting us via email or phone.
Failure to submit an exercise request before our cutoff time may result in the contract(s) not being exercised.
Please provide the symbol, call/put, expiration date, strike price, and the quantity you want to be exercised when reaching out. Additionally, your account must have the buying power to handle the exercise request.
Note that you may only request an early exercise of American-style options. European-style options, namely cash-settled index options like SPX, can only be exercised based on the settlement price at expiration.
