What happens if I hold an option until expiration?
Holding an option until expiration means the contract will either expire worthless, be exercised, or lead to assignment, depending on whether the option is in the money and on your broker’s rules.
What can happen at expiration
- A long option that finishes out of the money usually expires worthless
- A long option that finishes in the money may be exercised automatically, depending on broker policy and account settings
- A short option that finishes in the money can be assigned, which can create a long or short stock or cash position at the broker
- A multi-leg strategy may not settle as a single package at expiration if one leg expires and another is assigned or exercised
How OptiView helps
- OptiView shows options payoff visualization and projected profit or loss up to expiration, assuming no early assignment
- OptiView helps users analyze breakeven points, max profit, and max loss before expiration
- OptiView does not exercise options, prevent assignment, or manage broker-side expiration instructions
- Refer to your broker's help page for further information
Why expiration matters
- Expiration can change an options position into a stock position or a cash settlement at the broker
- Short options can create assignment risk even when the modeled payoff looked acceptable before expiration
- Retail traders should review broker deadlines and account buying power before holding contracts into expiration