What is auto-exercise?

Auto-exercise is an automatic process that triggers the exercise of your long options position when the contract is in-the-money (ITM). For calls, you must have sufficient cash to buy shares; for puts, you must hold enough shares to sell.

This process generally starts about 1.5 hours before market close and runs until 30 minutes before close, after which the contract may be auto-liquidated if still open. Auto-exercise helps you capture intrinsic value without manual action, provided account requirements are satisfied.

Please note auto-exercise is subject to market liquidity and is not guaranteed.

If you have multiple contracts eligible for auto-exercise but only sufficient funds for a few of them, the auto-exercise will be carried out on a random basis.

What is auto-liquidation?

Auto-liquidation is an automatic process that occurs only when a contract is in-the-money (ITM) to protect your position. It typically begins about 30 minutes before market close and is executed on a best effort basis at the best available price to either realise profits or limit potential losses.

When does auto-liquidation happen?

The auto-liquidation process is triggered when the account does not have enough cash or shares to support the potential exercise or assignment of an ITM option.

For example, if an ITM call option requires you to purchase shares you cannot afford, or an ITM put option requires selling shares you do not hold, the system will attempt to close the position automatically. This helps avoid a failed settlement or an unintended negative balance. Since margin is not involved, liquidation strictly happens only for ITM contracts to ensure proper settlement or exercise.

Please note that auto-liquidation is subject to market liquidity and is not guaranteed. If the system cannot close the position due to low liquidity, wide spreads, or rapid price movement, the contract may still be exercised or assigned at expiration.