How To Allow Trades To Expire ITM

In Options Auto Trader, by default, the system will automatically close any in-the-money (ITM) positions 30 minutes before the market closes on expiration day to help prevent assignments or unexpected losses. However, if you want to allow your trades to expire ITM, you can configure this setting under the advanced exit rules. This article will guide you through how to enable this option.

Step 1: Understanding ITM Expiration

When an options contract is in the money (ITM) at expiration, it can result in the assignment of the underlying asset. By default, Options Auto Trader will close these ITM positions to avoid such assignments or large losses.

However, if your strategy involves allowing trades to expire ITM—such as in covered call strategies or specific income-generating tactics—you have the option to allow this.

Step 2: Access Advanced Exit Rules

To allow your trades to expire ITM, you need to modify the advanced exit rules:

1. Log into your Options Auto Trader account.
2. Navigate to the Auto Trader page.
3. Click the gear icon next to the auto trader you want to adjust.
4. Scroll down to the Advanced Exit Rules section.

Step 3: Enable "Allow Trades To Expire ITM"

Within the Advanced Exit Rules, you’ll find an option related to ITM expiration:

1. Look for the setting labeled "Allow My Trades to Expire ITM."
2. By default, this option is set to false, meaning the system will automatically close any ITM trades 30 minutes before the market closes on expiration day.
3. To allow your trades to expire ITM, set this option to Yes by selecting the checkbox or toggling the switch.

This change ensures that your positions will remain open even if they are ITM on expiration day, allowing the contracts to expire as per your strategy.

Step 4: Save Your Changes

Once you’ve enabled the setting to allow ITM trades to expire:

1. Scroll to the bottom of the settings page.
2. Click Save to confirm your changes.

Your auto trader will now allow ITM positions to remain open and expire instead of automatically closing them before the market closes on expiration day.

Step 5: Monitor Your ITM Positions

After enabling the option to allow trades to expire ITM, it’s important to monitor your positions as expiration day approaches. Since ITM trades can result in assignments, make sure your strategy accounts for this possibility, particularly if you don’t want to take delivery of the underlying asset.

Conclusion

Enabling the "Allow My Trades to Expire ITM" setting gives you more control over how your ITM options are handled at expiration. By default, ITM trades are closed 30 minutes before market close on expiration day, but by adjusting this setting under Advanced Exit Rules, you can allow these trades to expire ITM to better suit your trading strategy.

If you have any questions or need further assistance, don’t hesitate to contact our support team.