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Use the Option Exercise window (for US options only) to exercise options prior to their expiration date, or to exercise options on Expiration Friday that would normally be allowed to lapse according to clearing house rules. You can also import a file with instructions, using the Load From File command on the File menu.
To exercise an option
1. Open the Option Exercise window.
- In Mosaic: From the Account menu select Option Exercise.
- From Classic: From the Trade menu in select Option Exercise.
2. Select an option to see details, including your current position in the underlying, the current underlying NBBO, and the deadline to submit the exercise instruction.
3. Select the option(s) you want to exercise or lapse, and use the Scheduled Action field to set up the exercise instruction.
- Choose Exercise to exercise the entire position.
- Choose Partial (when applicable) to exercise or lapse a portion of the position.
- Choose Lapse (only available on the last trade date).
4. The instruction is displayed like an order row. Click “T” to transmit the instruction. To discard without submitting, use the right-click menu and select Discard Modifications.
Note: The Details window displays when you select a contract, and shows a deadline for submitting the instruction today along with all options positions in the underlying and the accompanying market data.
The Orders page of Global Configuration provides a selection box where you can specify that an option exercise request be final, and therefore cannot be canceled, or editable until the cutoff time (default), which varies by clearing house. Electing "final and cannot be canceled" allows for immediate delivery of the stock in the account. Note that some contracts will not follow this rule and will remain revocable up until the clearing house deadline.
To specify this parameter, from the Mosaic File menu or Classic Edit menu, select Global Configuration and then Settings from the configuration tree on the left side
Accounts that hold dividend-paying positions that may be affected by early exercise will receive notification via email and in the Option Exercise window in the Optimal Action field approximately two days before the underlying goes ex-dividend, and options in the Watchlist and in your portfolio will show a yellow lightening icon next to them.
To better understand the mechanics of dividend-related early exercise, see the IB Knowledge Base article Considerations for Exercising Call Options Prior to Expiration.
The Option Exercise window displays actionable Long positions in the top half of the page, and non-actionable Short positions in the bottom half of the window. On ex-div – 1, for all short positions in OCC stocks with dividends, we will project whether the option will be assigned or not.
Note that the system does not make these projections when the dividend amount is uncertain, e.g. for ETFs, halted stocks and stocks with other uncertainties.