How does options exercise and expiry work?

‍Listed Options

Stock Options
Stock and contract options are typically physically settled, while index options are cash settled.

• Holders of American-style options may exercise at any time before expiry—except on the final trading day.

• Upon exercise, the option position is closed at zero value, and a position in the underlying asset is instantly created at the strike price.

• Clients are encouraged to consider closing the option in the market and acquiring the underlying asset separately for greater flexibility.

• Currency options on CME cannot be exercised if they are out-of-the-money; such requests will be automatically cancelled.

Contract Options

Totality offers two types of contract options, as defined by the exchange:

• American-style options:

• Can be exercised online at any time before expiry, excluding the last trading day.

• If in-the-money, they convert into a specific futures contract, which remains visible in the Account Summary until settlement.

• European-style options:

• Can only be exercised automatically at expiry.

• If in-the-money, they are cash settled at expiry.

Note: Physically settled listed options that are more than 5% out-of-the-money cannot be exercised.

Details on settlement style and expiry can be found directly in the trade ticket and trading conditions.

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