EQO

Stock options

Stock options In-The-Money (ITM) - Execution at the expiring

The Stock options have delivery requirements to be met at the expiring, meaning that in order to be executed and to receive the underlying stocks, the account must reserve the equivalent cost of acquiring the stocks. If this is not matched, the stock option position will be closed usually 2h before expiry.

So two scenarios can occur when Stock options are In-The-Money (ITM):

• (A) You have sufficient Cash to buy the underlying stock > you will be assigned to buy at the strike price.
• (B) You do NOT have sufficient Cash to buy the underlying stock -> your stock option position will be closed before expiry.

How the system manage the risk and margin spikes:

When approaching the expiry of a stock options and the option is In-The-Money (ITM) or close to be ITM, our system will start to calculate the costs of acquiring the underlying stocks and reserve the cash accordingly.

More specifically, 2 hours before the expiry, the system will start reserving more and more cash; this to ensure that the cash required acquiring the underlying at the strike price is available at the time of expiry.

The Cash that the risk system reserves is shown in the platform in the Initial Margin Requirement and Maintenance Margin Requirement fields. For this reason, a spike in your Margin Utilization around expiry can be experienced and in certain cases can reach or cross the levels at which normally a stop out would take place, in particular when the account has no sufficient cash available. But this is only a technical setup needed to make sure the account can meet the delivery requirements at the expiry. The account, in fact, will not be stopped based on this and will go back to the normal levels once the expiry is reached, unless other leveraged positions (ex. Forex, CFDs, Futures) are present, which do not match their own margin requirements (usually margin calls notifications will be activated).

You can monitor the quotes of different listed options simultaneously. We display the price curve for call and put options, across different expiries and strikes. Columns are customizable.

Launched from the options chain, this feature offers you a choice of common listed options strategies, such as:

• Custom strategies up to 4 legs
• US-listed options on OPRA and European listed options on Euronext Equity & Index Derivatives in Amsterdam and Paris exchange
• Configurable columns for Greeks and market data, such as volumes traded and open interests

You can change the expiry to another future date.

Rollover is available for listed options from the context menu in the position list.

Click on the show risk graph when building your listed options strategy.