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  • 2 years ago
Options Bootcamp 64: Settlement Myths and Misconceptions

Options Bootcamp 64: Settlement Myths and Misconceptions

Basic Training: Today we are going into the depths of option settlement. A question that is often asked in Group Coaching is that of the various settlement issues. Many option traders limit their universe of option trading to two broad categories: One group consists of individual equities and the similar group of exchange traded funds (ETFs). The other group is composed of a multitude of broad based index products. Individual equities and ETFs trade until the close of market on the third Friday of each month for the monthly series contracts. These days there are more and more ETFs and equities that also have weekly settlements too. These contracts are of American type and as such can be exercised by the owner of the contracts for any reason whatsoever at any time until their expiration. What is automatic exercise? Equity settlement? Cash settled indexes? Determining settlement? Mail Call: Listener questions and comments Question from Mike: Hello, Love the show. I am curious as to