A procedure used by The Options Clearing Corporation to exercise in-the-money options at expiration. This procedure protects the owner from losing the intrinsic value of the option because of failure to exercise. Unless instructed not to do so, The Options Clearing Corporation will exercise all expiring equity options that are held in customer accounts if they are in the money by 75 cents or more.

A process for exchanging traded options under which the in the money options are exercised on a certain date.

The mandatory exercise by a designated clearing house of an in-the-money option at expiration, unless the holder of the option has submitted specific instructions to the contrary.

Following options expiration, an option which is in-the-money by $100 or more is exercised automatically by the clearinghouse, unless the holder of the option submits specific instructions to the contrary.

A procedure implemented to protect an option holder where the Option Clearing Corporation will automatically exercise an "in the money" option for the holder.

Occurs after an option expires. Each exchange and its clearing house has rules which govern this exercise. There are minimum in-the-money requirements. A holder of an option must inform the clearing house not to automatically exercise an option. These instructions not to exercise may be due to relatively high transaction costs, increases in position limits, or unacceptable alterations in position profiles. Also, after hours trading indications may suggest dramatically different prices than those used to determine the automatic exercise in-the-money amounts.

A procedure for exchange traded options under which the in-the-money options are exercised on a given date.

A procedure whereby clearing houses exercise all in-the-money options at expiry without requiring instructions (in the form of an exercise notice) from the holder. Most automatic exercise routines will not exercise options which are only just in-the-money.

When the clearing house excercises an in-the-money option at expiration.

A protection procedure whereby the Options Clearing Corporation attempts to protect the holder of an expiring in-the-money option by automatically exercising the option on behalf of the holder.

The mandatory exercise by a designated clearing house of options which vary from their current (written) asset price.