What risk team procedures are in place for options?

Our risk team monitors potential expiration risk throughout the day and periodically sends notifications to accounts with excessive potential expiration risk. However, as the end of the day approaches, our Risk team may start closing positions that pose excessive risks.

The number of accounts with potential risk and market volatility can affect how early our risk team needs to act. However, our risk team will try to hold off as long as we can to give our clients as much time as possible to manage their positions. Monitoring requests made after 2.00 pm CT will be handled with best efforts. Furthermore, if you plan on trading day of expiration options, then any position(s) closed by our Risk team will count towards your day trade count.

How can I request to delay risk team intervention?

Do you plan to trade or hold a day of expiration option(s) and want to have extra time to monitor your positions? You can opt for additional position monitoring time by informing our Risk team.

If you manage multiple trading accounts, you will need to select each account that you plan on monitoring from the More Accounts dropdown menu. Additionally, monitoring requests are only valid on the trading day it is requested. You must click I'm Monitoring each expiration day if you plan on holding or trading day of expiration options.

By clicking, I'm Monitoring and agreeing to the Terms and Conditions; you are assuring our Risk team that you will close any expiring position(s) that may pose an excessive risk. We will allow you best efforts to close your expiring position–generally up until the last 15-20 minutes of trading.

Expiration notice email

You may receive an Expiration Notice from our Risk team if your account holds an expiring option(s) position. We strongly request that you promptly inform us whether you plan on monitoring your expiring positions by clicking I'm Monitoring in the Risk Monitoring section. However, please keep in mind the following:

We can not maintain "standing requests"; you will click I'm Monitoring each time on the expiration day.
If you indicate that you are monitoring your positions, our risk team may still close positions on your behalf.
If you indicate that you are monitoring your positions and do not act, we may not accept your monitoring requests going forward.
Short options can still be assigned if they close out of the money. As a result, a short option that closes out-of-the-money may pose potential expiration risk. The only way to eliminate expiration risk associated with short options is to close them.

If you do not close a position that poses an excessive risk, we may trade stock against it as a hedge. The resulting stock position will be your responsibility.