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Automatic exercise

The procedure that prevents in-the-money equity options from expiring and becoming worthless. In this procedure, the 

Clearing

 firm will 

Exercise

 certain kinds of options that are in the 

Money

 without instruction from the 

Option

 holder, thus allowing 

Option

 holders who may not be monitoring an 

Option

 to still capture a 

Profit

. Not all options are subject to automatic exercise. Certain options (known as "capped-style options") become subject to 

Automatic exercise

 if the price of the 

Underlier

 hits a certain price (known as the "cap value"), regardless of when the price is achieved (this is only possible in the case of an American-style option). Other options will be subject to 

Automatic exercise

 just before expiration and at no other time. In such cases, the 

Trigger

 for 

Automatic exercise

 is either when the 

Option

 is in the money, or when it is in the 

Money

 by a certain amount.



Related Terms: 26

ACH

,

American-style option

,

Automatic exercise

,

APT

,

Clear

,

Clearing

,

Cap

,

Clearing firm

,

Equity option

,

Exercise

,

ITS

,

Low

,

Money

,

NOW

,

Option

,

Option holder

,

Own

,

Profit

,

Ratio

,

ROC

,

ROCE

,

Ring

,

Style

,

Trigger

,

Underlier

,

UIT


Other Related Pages:

Category: Trading


Starting With: A


Semi Related Terms: 705  CLICK HERE TO VIEW

10-Q

,

10-K

,

52-week low

,

Allowance for depreciation

,

Asset/equity ratio

,

ACH

,

Automatic Clearing House

,

Automatic Funds Transfer

,

Accreted value

,

Accrual of discount

,

American Municipal Bond Assurance Corporation

,

American Stock Exchange

,

Amortization of premium

,

Amortized value

,

Asked price

,

Asking price

,

At par

,

All or any part

,

At best

,

At call

,

Average equity

,

Active money

,

Automatic reinvestment plan

,

Automatic stabilizers

,

Adjusted futures price

,

American Depositary Receipt

,

American Depositary Share

,

All-risks coverage

,

At risk

,

Add-on service

,

Abstract of title

,

Action to quiet title

,

As is

,

Assignment to creditors

,

Attorney in fact

,

Assignment of mortgage

,

A shares

,

Assets under management

,

Automatic investment plan

,

Automatic withdrawal

,

Average price per share

,

Aggregate exercise price

,

American option

,

American-style option

,

Asian option

,

At the money

,

Automatic exercise

,

Average option

,

Across the board

,

Additional paid-in capital

,

APT

,

Amount recognized

,

Assessed value

,

Against the box

,

At the bell

,

At the close

,

At the figure

,

At the full

,

At the market

,

At the opening order

,

Automated Pricing and Reporting System

,

Away from the market

,

Below the line

,

Book profit

,

Books of final entry

,

Books of original entry

,

Book value per share

,

Banking Act of 1933

,

Barren money

,

Bid-to-cover ratio

,

Bureau of Public Debt

,

Brokerage firm

,

Brought over the wall

,

Buying on margin

,

Buy on close

,

Buy on opening

,

Buy the book

,

Broad money

,

Balance of payments

,

Board of Governors

,

Break-even analysis

,

Breaking the syndicate

,

Bill of exchange

,

Bill of sale

,

Breach of trust

,

By the book

,

Bailing out

,

Breakup value

,

B shares

,

Buy and write

,

Before-tax income

,

Break-even tax rate

,

Breadth-of-market theory

,

Beat the gun

,

Cash asset ratio

,

Cash ratio

,

Collection ratio

,

Cost Of Goods Sold

,

Cost of sales

,

Clear

,

Clearing

,

Call price

,

Cap

,

Certificate of Participation

,

Committee on Uniform Securities Identification Procedures

,

Conversion option

,

Conversion parity price

,

Conversion price

,

Conversion ratio

,

Conversion value

,

Current market value

,

Call money rate

,

Clearing corporation

,

Clearing firm

,

Clearing member

,

Closed out

,

Code of procedure

,

Capitalization of income

,

Cap rate

,

Consumer Price Index

,

Cost of Living Adjustment

,

Cost-of-living index

,

Council of Economic Advisers

,

Cash and carry trade

,

Cash price

,

Chasing the market

,

Cheapest to deliver

,

Chicago Board of Trade

,

Cash surrender value

,

Cash value

,

Cash value life insurance policy

,

Cost-of-living rider

,

Certificate of stock

,

Chicago Board Options Exchange

,

Cost of carry

,

Certificate of title

,

Clear title

,

Contract for deed

,

Cancellation of debt

,

Cash-out refinancing

,

Certificate of Claim

,

Cost of debt capital

,

Cost of funds

,

Crowding out

,

C shares

,

Call option

,

Call ratio backspread

,

Cashless exercise

,

Class of options

,

Close to the money

,

Covered option

,

Certificate of Occupancy

,

Cloud on title

,

Cash or Deferred Arrangement

,

Class A Shares

,

Class B Shares

,

Crash of 1929

,

Crash of 1987

,

Child and dependent care credit

,

Coefficient of determination

,

Cup and handle

,

Certificate of delivery

,

Close a position

,

Close out

,

Closing price

,

Cornering the market

,

Curbs in

,

Curbs out

,

Deficit net worth

,

Direct profit

,

Deposit in transit

,

Date of issue

,

Date of payment

,

Debt-equity swap

,

Dollar price

,

Division of Enforcement

,

Division of Investment Management

,

Division of Market Regulation

,

Do Not Reduce

,

Date of record

,

Dividend in arrears

,

Dividend payout ratio

,

Desk (the)

,

Division of labor

,

Delivery price

,

De-escalation clause

,

De facto

,

Doing business as

,

Durable Power of Attorney

,

Date of maturity

,

Debtor in possession

,

Debtor-in-possession financing

,

Deed of Release

,

Deed of Trust

,

Discharge of bankruptcy

,

Discharge of lien

,

Due-on-sale clause

,

Deep in the money

,

Deep out of the money

,

Deed of Surrender

,

Department of Housing and Urban Development

,

Dogs of the Dow

,

Daily low

,

Depth of market

,

Economic value

,

Efficiency ratio

,

Eurodollar certificate of deposit

,

Embedded option

,

Equity-linked note

,

Equity risk premium

,

Escrowed to maturity

,

Event risk

,

Ex-legal

,

Either-or order

,

Extended broad money

,

E-mini

,

Exchange for futures

,

Exchange for physical

,

Exchange of spot

,

Ex-pit transaction

,

Equity funding

,

Equity option

,

Ex-all

,

Exchange ratio

,

Equity kicker

,

Equity mortgage

,

Equity fund

,

Early exercise

,

European-style option

,

Exchange-traded option

,

Exercise

,

Exercise assignment

,

Exercise limit

,

Exercise notice

,

Exercise ratio

,

Expiration cycle

,

Expiration date

,

Expiration time

,

Ex-warrants

,

Equity REIT

,

Education IRA

,

Employee Retirement Income Security Act of 1974

,

Exclusion ratio

,

Equity capital

,

Equity financing

,

Equity swap

,

Ex-rights

,

Ex-rights date

,

Even lot

,

Even spread

,

Even up

,

First In First Out

,

Fixed-charge coverage ratio

,

Form 10-Q

,

Federal Savings and Loan Association

,

Face-amount certificate

,

Flight to quality

,

Flow of funds

,

Full price

,

Fill or kill

,

Firm quotation

,

Front-ending an order

,

Fiat money

,

Foreign currency option

,

Forward P/E

,

Factors of production

,

Favorable balance of trade

,

Free market price

,

Forward price

,

Futures option

,

Futures price

,

Face amount

,

Fee-for-service

,

Fair market value

,

Form 8-K

,

Form S-1

,

Firm commitment offering

,

Friends and family offering

,

Firm commitment lending

,

Full faith and credit

,

Family of funds

,

Fund of funds

,

Far option

,

Free and clear

,

Free right of exchange

,

Fair value

,

Gross profit

,

Gross profit margin

,

Government Securities Clearing Corporation

,

Good Til Canceled

,

G-7

,

GDP implicit price deflator

,

General Agreement on Tariffs and Trade

,

G-8

,

Growing equity mortgage

,

Growth and income fund

,

Group IRA

,

Gather in the stops

,

Hart-Scott-Rodino Act of 1976

,

Hit the bid

,

House of issue

,

Hedge ratio

,

Health Insurance Portability and Accountability Act

,

Holder in due course

,

Hang out loan

,

High-ratio mortgage

,

Home equity

,

Home Equity Conversion Mortgage

,

Home equity debt

,

Home equity line of credit

,

Home equity loan

,

Head and shoulders

,

High-low index

,

Hammering the market

,

Held at the opening

,

Holding the market

,

Horizontal price movement

,

Imputed value

,

In escrow

,

Intrinsic value

,

Investment value

,

In-house

,

Investment Advisor Act of 1940

,

Investment Company Act of 1940

,

In line

,

Insider Trading sanctions Act of 1984

,

Internal Rate of Return

,

Indication of interest

,

In intestacy

,

Interest-only loan

,

Interest rate cap

,

In play

,

In-process research and development

,

Index option

,

Interest rate option

,

I/O strip

,

Interest-only strip

,

Income replacement ratio

,

In-service withdrawal

,

IRA rollover

,

Imbalance of orders

,

In and out

,

In sympathy

,

In the tank

,

ITS

,

Jointly and severally

,

Jumping the gun

,

Joint will

,

Joint and several liability

,

Just title

,

Joint and survivor annuity

,

Junior equity

,

Know Your Customer

,

Knock-out option

,

Last In First Out

,

Liquidation value

,

Liquidity ratio

,

Lender of last resort

,

Law of one price

,

Lending at a rate

,

Limit-on-close order

,

Limit price

,

Long Market Value

,

Lawful money

,

Law of demand

,

Law of supply

,

London International Financial Futures and Options Exchange

,

Long-Term Equity Anticipation Securities

,

Letter of comment

,

Liquidity event

,

Living will

,

Lifetime cap

,

Line of credit

,

Loan-to-cost

,

Loan-to-value

,

Loan value

,

Loan-value ratio

,

Lock-in

,

Lapsed option

,

Listed option

,

Large cap

,

Leading the market

,

Like-kind exchange

,

Locked in

,

Long-term gain or loss

,

Level I quotes

,

Low

,

Money center bank

,

Money order

,

Market conversion price

,

Maturity value

,

Make a market

,

Market if touched order

,

Market on close order

,

Mark-to-market

,

May Day

,

Member firm

,

Money management

,

Medium of exchange

,

Money

,

Marginal propensity to consume

,

Money at call

,

Money factor

,

Market cap

,

Medium-cap

,

Micro cap

,

Mid cap

,

Market-value weighted index

,

Maximum price fluctuation

,

Money flow

,

Net book value

,

Net profit

,

Net profit margin

,

Near money

,

Negotiable certificate of deposit

,

Negotiable Order of Withdrawal

,

NOW

,

Notice of Sale

,

National Association of Securities Dealers

,

National Association of Securities Dealers Automated Quotations system

,

National Securities Clearing Corporation

,

Net capital ratio

,

No limit order

,

Nonmember firm

,

No quote

,

Non-equity option

,

No-Fault

,

Net Asset Value

,

No-Action Letter

,

Null and void

,

Negative equity

,

No-lien affidavit

,

Notice of Default

,

Notional principal amount

,

No-load

,

Naked option

,

Near option

,

Non-qualified stock option

,

Non-statutory stock option

,

National Association of Real Estate Investment Trusts

,

Nasdaq Small Cap Market

,

No-load stock

,

Nominal value

,

No book

,

Off the books

,

One time charge

,

Other current assets

,

Other long term liabilities

,

Overhead ratio

,

Office of Thrift Supervision

,

Offering price

,

Out-of-favor

,

Over-the-Counter

,

On-floor order

,

On margin

,

Option account

,

Or better

,

Operating profit margin

,

Other income

,

One-share one-vote rule

,

Option

,

Opinion of title

,

On account

,

On-the-spot loan

,

Option income fund

,

Option chain

,

Option contract

,

Option holder

,

Option margin

,

Option pool

,

Option premium

,

Option price

,

Option pricing curve

,

Options Clearing Corporation

,

Option series

,

Option spread

,

Options Prices Reporting Authority

,

Option writer

,

Out of the money

,

Own

,

Old age, survivors, and disability insurance

,

On-balance volume

,

Odd lot buy/sell ratio

,

On close

,

One man picture

,

On open

,

On the opening

,

Open trade equity

,

Option exchange

,

Pooling of interests

,

Pre-depreciation profit

,

Pre-tax profit margin

,

Profit

,

Profit and loss statement

,

Profit margin

,

Pro forma

,

Payment-in-kind security

,

Premium over bond value

,

Premium over conversion value

,

Price Value of a Basis Point

,

Payment for order flow

,

Payout ratio

,

P&L

,

Profit warning

,

Provision for income taxes

,

Price index

,

Producer Price Index

,

Parity price

,

Price limit

,

Pre-existing conditions

,

Public offering price

,

Pour-over will

,

Power of Attorney

,

Principal amount

,

Prioritization of debt

,

Purchase-money mortgage

,

Private Market Value

,

Physical option

,

Price spread

,

Put option

,

Profit-sharing

,

Paid-in capital

,

Paid-in surplus

,

Percent held by institutions

,

Pre-syndicate bid

,

Private Investment in Public Equity

,

Public equity

,

Preservation of capital

,

Put ratio backspread

,

Point-and-figure chart

,

Profit ratio

,

Painting the tape

,

Paper profit

,

Priced out

,

Price range

,

Price-weighted index

,

Profit-taking

,

Put/call ratio

,

Private equity

,

Replacement value

,

Reports and Records

,

Residual value

,

Return of capital

,

Return on Capital

,

Return on Invested Capital

,

Return on Total Assets

,

Regulation Q

,

Reserve ratio

,

Redemption price

,

Reading the tape

,

Real-time trade reporting

,

Regulation D

,

Regulation G

,

Regulation T

,

Regulation U

,

Round of funding

,

Rules of Fair Practice

,

Rate of exchange

,

Reciprocal of European terms

,

Retail Price Index

,

Ratio

,

Regulation A

,

Right of first refusal

,

Right of rescission

,

Right to Know

,

Revolving line of credit

,

Right of recourse

,

Rule of 78

,

Ratio calendar combination

,

Ratio calendar spread

,

Ratio spread

,

Ratio write

,

Registered options principal

,

Right of redemption

,

Retirement Equity Act of 1984

,

Roth IRA

,

Ratio analysis

,

Return on Capital Employed

,

ROC

,

ROCE

,

Rate of return

,

Realized profit

,

Real rate of return

,

Real-time

,

Ring

,

Salvage value

,

Selling, General and Administrative Expenses

,

SG&A

,

Savings and Loan

,

Sight letter of credit

,

S&L

,

Securities and Exchange Commission

,

Straight value

,

Segregation of securities

,

Sell the book

,

Stop price

,

Standard of living

,

Settlement price

,

Spot price

,

Second-to-die insurance

,

Settlement options

,

Surrender value

,

Short interest ratio

,

Stock Clearing Corporation

,

Stock option

,

Stock option plan

,

Severally but not jointly

,

Subscription price

,

Statute of Limitations

,

Sale and leaseback

,

Satisfaction of debt

,

Staggered board of directors

,

Style

,

Selling the spread

,

Short market value

,

Single option

,

Spread option

,

Savings Incentive Match Plan for Employees

,

SIMPLE IRA

,

Simplified Employee Pension IRA

,

Spousal IRA

,

Shareholder value

,

Share price

,

Small cap

,

Split-adjusted price

,

Selling short against the box

,

Shorting against the box

,

S Corporation

,

Short-term gain or loss

,

Subchapter M

,

Subchapter S Corporation

,

Schedule C

,

Securities Act of 1933

,

Securities Acts Amendments of 1975

,

Securities Exchange Act of 1934

,

Seek a market

,

Smart money

,

S&P phenomenon

,

Stop and reverse

,

Stopped out

,

Tangible net worth

,

Time deposit

,

Time draft

,

T-Bill

,

Term to maturity

,

Take a position

,

Time order

,

Trailing P/E

,

Tight money

,

Tenancy by the entirety

,

Time note

,

Truth in Lending

,

Theoretical value

,

Time spread

,

Tenancy at will

,

Time-sharing

,

Top hat plan

,

The Street

,

Time stop

,

Timing the market

,

Taxable event

,

Taxpayer Relief Act of 1997

,

Tax Reform Act of 1986

,

Tax Reform Act of 1993

,

Trading profit

,

Top out

,

Take a bath

,

Target price

,

Trigger

,

U.S. Government Agency Security

,

U.S. Savings Bond

,

U.S. Treasury

,

U.S. Treasury Bill

,

U.S. Treasury Bond

,

U.S. Treasury Note

,

U.S. Treasury Securities

,

Unappropriated profit

,

Underlier

,

Uncovered option

,

UIT

,

Unit of trade

,

Unit of trading

,

Unrealized profit

,

Value stock

,

Variable ratio write

,

Value averaging

,

Value investing

,

Variable ratio plan

,

Value Added Tax

,

Written-down value

,

With interest

,

Wage price spiral

,

Waiver of premium

,

Widow-and-orphan stock

,

W-2 Form

,

W formation

,

When, as, and if issued

,

When issued

,

Wilshire 5000 Equity Index

,

X or XD

,

Year-To-Date

,

Yield to call

,

Yield to maturity

,

Yield to worst

,

Y shares


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