Closing a position before expiration
The most common way to exit an option is to sell the contract before it expires. You don't have to wait until expiration or exercise the contract.
If you bought a Call or Put (long position), you can sell to close at any time before expiration.
If you sold a Call or Put (short position), you can buy to close and cancel your obligation.
👉 Closing before expiration lets you capture the remaining value in the contract without needing additional capital.
What happens if you hold the contract until expiration
If your option expires Out-of-the-Money (OTM): The contract expires worthless. You lose only the premium paid. No additional fee.
If your option expires In-the-Money (ITM): At 3:00 p.m. ET on the expiration date, Hapi will attempt to automatically close your position. If it cannot be closed, the contract will be automatically exercised at market close. In that case, a fee of $5 per contract applies.
👉 It is your responsibility to actively manage your positions. If you don't want your option to be exercised, close it before 3:00 p.m. ET on the expiration date.
Exercise and assignment
Exercise: as the buyer, you can choose to execute your right to buy or sell the shares at the strike price. Fee: $5 per contract.
Assignment: as the seller, if the buyer decides to exercise, you are obligated to fulfill the contract. This can happen at any time before expiration, not just at the end.
Need help? You can contact the support team from within the app.
👉 The support team does not provide investment, tax, or legal advice.
Options involve significant risks and are not suitable for all investors. You may lose the entire premium and, in certain strategies, take on additional obligations. Before trading options, investors should review the Characteristics and Risks of Standardized Options (ODD). Brokerage services are provided by Hapi Securities, LLC, a U.S.-registered broker-dealer and member of FINRA and SIPC. This content is informational and does not constitute an investment recommendation.