Important: Options are high-risk products. At expiration you can lose the entire premium paid.
Closing a position before expiration
If you're long (you bought the option): place a sell to close order.
If you're short (you sold the option): place a buy to close order.
If you hold the position to expiration
OTM (out of the money): The option expires worthless. You lose the premium paid. No exercise fee is charged.
ITM (in the money) — two possible scenarios:
Hapi will attempt to close the position at 3:00 p.m. ET on the expiration day.
If it can't be closed before that time, the option is exercised automatically at market close. Check the current exercise fee in the app/web.
Exercise and assignment
Exercise and assignment may incur the current fee published in the app/web.
Assignment can occur at any time before expiration and is outside your control.
Important — Risks of trading options
Options are not suitable for all investors and involve a high degree of risk. Before trading options you must read the disclosure document "Characteristics and Risks of Standardized Options" (Options Disclosure Document / ODD), available at https://hapi-public-documents.s3.us-east-1.amazonaws.com/occ-options-disclosure-document.pdf. Supporting documentation for any claim is available on request.
Options involve market risk, high volatility, illiquidity, time decay, and expiration risk. If you buy an option, you can lose the entire premium you paid —within a relatively short period— if the option is worthless at expiration. If you sell (write) an option, losses can be substantial and, for uncovered options, theoretically unlimited. Assignment can occur at any time before expiration, without prior notice.
This material is for informational purposes only and is not a recommendation, advice, or a solicitation to buy, sell, or hold any option, security, or strategy. Hapi Securities is self-directed and does not make investment recommendations. Trading options requires prior approval of your account for the applicable trading level.
Options, stocks, and ETFs are offered by Hapi Securities LLC, member of FINRA and SIPC (CRD #311868); custody and clearing via Apex Clearing Corporation. SIPC protects certain securities in the event of the broker-dealer's insolvency; it does not protect against market losses and does not cover crypto. More information at https://www.sipc.org.