Canadian TDW Members-----Question.

[My Dream]

I received this notice in our TDW account and have absolutely no idea what it means. I don't even know if it pertains to me. I presently have some self-directed RSP's, mutual funds and 2 stocks with them. Can someone tell me and if I should act on it and if so…….what the heck does it mean? Please be gentle on the explanation since as you can see on your left, I am a newbie to investing.



Important Changes to “in-the-money” Equity Options


16-Oct-2006 9:00:00 AM EDT
Starting with the October 2006 expiry, the OCC and CDCC (US and Canadian option clearing corporations, respectively) will be reducing the automatic threshold for "in-the-money" equity options from $0.25 to $0.05.

IMPACT: The probability of being exercised (on a long position) or being assigned (on a short position) will increase substantially. Long or short equity positions held into expiry run a greater chance of being auto-exercised or assigned if the underlying equity is in-the money by more than $0.05.

If you wish to avoid being auto-exercised, you have two options:


1. Close out your positions before the option's cessation of trading; or,
2. If you have long positions, contact the Options Desk at the number below and provide instructions to " DO NOT EXERCISE.”




Thanks

[LOL!]

This notice is about options trading. I trade options with TDW and it applies to me.

It does not apply to you. You don't need to do anything about this notice.

[Mr._johngalt]

Quote:

Originally Posted by My Dream If you wish to avoid being auto-exercised,

"Auto exercised"?
I used to do that a lot when I was a kid. Never tried to avoid it.
Afraid I might get backed up.

JG

[My Dream]

Quote:

Originally Posted by LOL! This notice is about options trading. I trade options with TDW and it applies to me. It does not apply to you. You don't need to do anything about this notice.

Thanks LOL!, maybe it's something I should look into when I'm more.........as you say.........savvy!

[bosco]

Quote:

Originally Posted by Mr._johngalt "Auto exercised"? I used to do that a lot when I was a kid. Never tried to avoid it. Afraid I might get backed up. JG

that explains your nearsightedness.....

[Mr._johngalt]

Quote:

Originally Posted by bosco that explains your nearsightedness.....

Yep, when they told me I'd go blind I decided I'd just do it until
I needed glasses.

JG

[My Dream]

Quote:

Originally Posted by Mr._johngalt Yep, when they told me I'd go blind I decided I'd just do it until I needed glasses. JG

I guess you can't wear contacts when you have bifocals JG?

[kcowan]

It means that the in the money threshhold has dropped from $25 to $5 per option held. It could generate more activity in your account than you want when trading for as little as a $5 difference.

[steinj]

John Galt you crack me up. I'm so glad you're back. We need curmudgeons like you on this board. Auto-exercise. Yeesh. Who writes this gobbledy gook anyways? Jo Jo