Exercising Options
If you hold a long position in an option contract, whether a call or a put, you may choose to exercise your right under the terms of that contract. Exercising an option means requesting the delivery or settlement specified in the contract from the counterparty who sold the option.
The process for exercising options may differ depending on the product and platform. We will guide you through the steps to ensure you understand how to proceed when you decide to exercise an option position.
Exercising Options in TWS
If you wish to exercise option contracts using the Trader Workstation (TWS) platform, you can do so through the dedicated Option Exercise window.
To begin, click on Trade in the menu bar and select Option Exercise. In the new window, locate the option(s) listed under Long Positions.To initiate an exercise request, click Select in the Exercise Action column.
You will then be given two choices:
- Exercise Early – All (to exercise all contracts in that position), or
- Exercise Early – Partial (available when holding more than one contract).
If you choose to exercise only part of your position, enter the number of contracts you wish to exercise in the appropriate field and confirm by clicking OK.
Once your selection is confirmed, a blue T-button (Transmit) will appear on the right-hand side. Click this button to submit your exercise request.
Please be aware that exercising options may have financial consequences. Make sure to review the contract specifications and settlement terms before proceeding.
Exercising Options in Mobile App
To exercise an option position using the mobile app, go to the Portfolio tab and select Options. Then, tap on the long option position you wish to exercise and choose Exercise Option.
If your position includes multiple option contracts, you will be asked to enter the number of contracts you would like to exercise. After confirming your selection, tap Submit Instruction to proceed.
If your position includes only a single option contract, you can proceed directly by tapping Submit Instruction.
Please note that exercising options may have financial and settlement consequences. It is important to review the product terms and your account’s available funds before submitting your instruction.
FAQ
Is it possible to exercise options in the LYNX+ platform?
At this time, it is not possible to submit option exercise requests directly through the LYNX+ trading platform.
If you wish to exercise an option position, you can do so via the Trader Workstation (TWS) desktop platform or through the LYNX Trading mobile app. These platforms provide dedicated tools for managing and exercising option contracts.
How can I cancel an option exercise instruction?
- TWS: To cancel an exercise instruction, simply click on Trade in the menu bar, then select Option Exercise. Next, locate the Exercise Action column on the right side and click the C-button (Cancel).
- Mobile App: To cancel an exercise instruction, first, navigate to the main menu and select Transactions. From there, go to the Orders tab and tap on the specific instruction you wish to cancel. Finally, use the slider located at the bottom of the app to confirm your choice.
Where can I locate information that the option has been exercised?
Information on option contracts that have been exercised over the last seven days is readily available on both the TWS desktop platform and the LYNX Trading mobile app.
- TWS: To access this information, navigate to the menu bar and click on Trade History. In the Action column, you will find confirmation of the exercise. For more detailed information about the exercise, click on the + symbol in the corresponding row.
- Mobile App: Access the main menu and choose Transactions, then select the Trades tab and pick the desired date. If any options were exercised that day, this information can be found in the Action column.
- Activity Statement: For a more comprehensive history, you can find information about option exercises in the Trades section of your Activity Statement. In the Code column on the right, you will find the abbreviation Ex, indicating that the option(s) have been exercised.
Instructions on how to generate an Activity Statement can be found here.
Will the option(s) be automatically exercised if it is ITM at the time of expiry?
Yes, options that are In-The-Money (ITM) at the time of expiry are typically automatically exercised by default. This applies unless you take action to prevent the automatic exercise.
If you are using the Trader Workstation (TWS) desktop platform, you have the option to request that your ITM contracts not be exercised.
To do so, click on Trade in the menu bar and select Option Exercise. In the Exercise Action column next to the relevant position, choose Lapse to indicate that the contract should expire without being exercised.
Please note that this option is only available on the last trading day before expiry.
Make sure to review your positions and instructions carefully, as exercising options may result in the purchase or sale of the underlying asset, which can have financial and settlement consequences.
Is there a commission charged for exercise or assignments?
LYNX does not charge a fee for exercising or being assigned on an option position. However, for some products, third-party costs may apply. These can vary depending on the exchange, product type, and underlying market.
You can find a full overview of applicable costs on the tariff page of your local LYNX website.
Please note that a standard commission applies to the exercise or assignment of European index options and futures options worldwide, which is charged at the time of contract expiry.
For U.S. stock and index options traded from Europe, no third-party delivery fees are charged for resulting long or short positions after an exercise or assignment.
It is important to review the full cost structure before trading or exercising options, as fees and conditions may vary per product and market..
How are options settled?
On the expiration date, the settlement of options takes place either through cash settlement or through physical delivery, depending on the structure of the specific option contract.
European-style options are generally settled in cash. In this case, the difference between the option’s strike price and its final settlement price is calculated, and the resulting amount is either credited to or debited from your trading account.
American-style options typically involve physical delivery. This means that, upon exercise or assignment, the underlying asset is either delivered to you or required from you, depending on your position.
The exact method of settlement depends on the characteristics of the instrument and the rules of the exchange where it is traded.
For more detailed information on how individual instruments are settled, please refer to the following link.
Is it possible to set up an immediate option exercise?
Yes, in the Trader Workstation (TWS) platform, you can configure the system to process an option exercise request immediately.
To adjust this setting, click on Edit in the menu bar and select Global Configuration. In the configuration window, navigate to Orders and then choose Settings. On the right side, you will see several options related to order instructions.
Under the section for option exercise requests, the default setting is usually editable until cutoff time. This allows you to modify or cancel the instruction up until the cutoff time defined by the clearing institution or broker.
If you prefer to submit an instruction that is processed immediately and cannot be changed afterward, select the setting final and cannot be cancelled. Once selected, confirm the change by clicking Apply.
Please be aware that when this setting is active, any exercise instruction you submit will be executed without the possibility of cancellation or adjustment. Make sure to review your position carefully before applying this option.