AUTOMATIC EXERCISE
automatic exercise: translation
A protection procedure whereby the Options Clearing Corporation attempts to protect the holder of an expiring in-the-money option by automatically exercising ( exercise) the option on behalf of the holder. Bloomberg Financial Dictionary
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A procedure whereby clearing houses exercise all in-the-money options at expiry ( expiry date) without requiring instructions ( in the form of an exercise notice) from the holder. Most automatic exercise routines will not exercise options which are only just in-the-money. Dresdner Kleinwort Wasserstein financial glossary