I am just wondering what happens if I box a trade to neutralize it, and then let it go in to expiration with it ITM.
I asked the trade desk on ToS, but didn't get an exact answer other than to say that all ITM options are auto exercised.
Example for discussion:
Initial trade: ABC call butterfly: +1 C 49/-2 C 50/+1 C 51 for 0.10 debit
Box it by selling a put butterfly: -1 P 49/+2 P 50/-1 P 51 for 0.50 credit
ToS' risk analyzer will show this as flat t+0 line and 0.40 profit.
What will happen if it is taken to expiry and ABC's closing price is: $49.50, $50.50, $51.50?
Thanks!
I asked the trade desk on ToS, but didn't get an exact answer other than to say that all ITM options are auto exercised.
Example for discussion:
Initial trade: ABC call butterfly: +1 C 49/-2 C 50/+1 C 51 for 0.10 debit
Box it by selling a put butterfly: -1 P 49/+2 P 50/-1 P 51 for 0.50 credit
ToS' risk analyzer will show this as flat t+0 line and 0.40 profit.
What will happen if it is taken to expiry and ABC's closing price is: $49.50, $50.50, $51.50?
Thanks!
Last edited: