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If you hold a long position in options (put or call), you can demand certain considerations from the counterparty who sold you the options. This process is called exercising options. We lead you through the process.
Exercising Options in TWS
Within the TWS, simply click on Trade in the menu bar, and then select Option Exercise.
In the Option Exercise window, under Long Positions, click Select in the Exercise Action column for the option(s) you want to exercise.
By clicking on Select, you will see two choices: Exercise Early – All and Exercise Early – Partial. The latter one becomes available if you hold more than one option contract. If you choose this option, you will need to specify the quantity of option contracts you want to exercise. Simply enter the appropriate quantity in the designated field and confirm by clicking OK button.
If you have a single option contract that you wish to exercise, or if you want to exercise all contracts in a position, just click on Exercise Early – All.
A blue T-button (Transmit) now appears in the right-hand column. Click on the button to submit a request to exercise.
Exercising Options in Mobile App
Navigate to the main menu and tap Option Exercise/Roll. Next, under Long Positions, tap the option position you want to exercise and select Exercise Options.
If you hold multiple option contracts within the position, please specify the quantity of options you wish to exercise in the designated Exercise field. After confirming your selection, tap on Submit Instruction to proceed.
However, if your option position consists of only one option contract, you can simply tap the Submit Instruction button.
Currently, it is not possible to exercise options within the LYNX+ trading platform. However, you can exercise options using the Trader Workstation (TWS) desktop platform or the LYNX Trading mobile app.
- TWS: To cancel an option exercise instruction, simply click on Trade in the menu bar, then select Option Exercise. Next, locate the Exercise Action column on the right side and click the C-button (Cancel).
- Mobile App: To cancel a exercise instruction, first, navigate to the main menu and select Transactions. From there, go to the Orders tab and tap on the specific instruction you wish to cancel. Finally, use the slider located at the bottom of the app to confirm your choice.
Information on option contracts that have been exercised over the last seven days is readily available on both the TWS desktop platform and the LYNX Trading mobile app.
- TWS: To access this information, navigate to the menu bar and click on Trade History. In the Action column, you will find confirmation of the option exercise. For more detailed information about the exercise, click on the + symbol in the corresponding row.
- Mobile App: Access the main menu and choose Transactions, then select the Trades tab and pick the desired date. If any options were exercised that day, this information can be found in the Action column.
- Activity Statement: For a more comprehensive history, you can find information about option exercises in the Trades section of your Activity Statement. In the Code column on the right, you will find the abbreviation Ex, indicating that the option(s) have been exercised.
Instructions on how to generate an Activity Statement can be found here.
Options that are In-The-Money (ITM) at expiry will be automatically exercised. However, you can configure the TWS desktop platform to not automatically exercise held options.
Simply click on Trade in the menu bar, then select Option Exercise. Locate the Exercise Action column on the right side and select Lapse.
This feature is only available on the last trade day.
LYNX does not charge any fee for exercising or assigning an options. However, third party costs may be charged for some options.
For U.S. stock options, third-party costs are applied: USD 0.000145 * Quantity Stock Sold, max 7.27 per Trade, and USD 0.000008 * Aggregate sales proceeds on stock
Standard commission for index options in Europe and futures options worldwide is charged at expiration of the contract.
No third-party costs charged for the delivery of a long or short position resulting from the exercise or assignment of U.S. index and stock options in Europe.
On the expiration date, options are settled through either cash settlement (applicable to European-style options) or physical delivery of the underlying asset (for American-style options). Cash settlement involves calculating the difference between the exercise price and the option’s settlement price. You will either be credited with the funds or have the amount debited from your trading account. On the other hand, physical settlement entails the receipt or delivery of the underlying asset.
For more information on the settlement of individual financial instruments, please refer to this link.
Yes, in the TWS platform, click Edit in the menu bar and then select Global Configuration.
In the Global Configuration window, navigate to Orders and then select Settings.
On the right side of the window, you will find the settings options for orders.
For Option exercise requests are item, you should have “editable until cutoff time” set by default. This allows you to change or cancel the instruction before the specified cutoff time determined by the clearing institution and broker.
To process an exercise instruction immediately, choose “final and cannot be cancelled”. Confirm your choice by clicking on the “Apply” button.
Please be aware that once you apply the “final and cannot be cancelled“, you will not be able to modify or cancel the exercise instruction at a later time.