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

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be answering the question, “Are there any advantages to letting options expire in the money?” And yes, we are talking about options that are in the money. This means you could have long options that you want to expire in the money or short option contracts that you're choosing to let expire in the money. And to me, really, the only advantage is stock ownership in one form or another. That would be the only advantage to me in letting contracts expire in the money. First, let's take the assumption that we are a long call option buyer or a long put option buyer and we want the stock to expire in the money. The only reason that we would want that to happen would be to convert our option position into short or long stock. Again, there's no real pricing advantage to it because at the end of expiration, the option contracts are going to trade basically in parity with the stock if there's any value left i