The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “What happens when a call option expires in the money?” There’s a couple of keywords in there that you should be paying attention to if you’re listening to this right now and that is that you have a call option and it is expiring in the money. If a call option expires in the money, it means it has intrinsic value and it will be exercised and/or assigned. Depending on what side of the contract you’re on, whether you’re an option buyer or an option seller, if the call option expires in the money, it has intrinsic value and it will be assigned. That means if you are long the call option, you are going to basically auto-exercise your contract and convert your call option into long stock. If you are short the call option, you’re going to effectively be assigned the contract and convert your short call option into short stock. That’s simply all that happens in the process. As always,