Giving up exercise rights for an options contract can impact your options positions and potential profits. At BBAE, there are two options if you want to give up the exercise rights of an in-the-money options contract:
1. Sell the option on the open market: If you choose to sell the option on the open market, you can keep the gain from the transaction. This allows you to realize any profits without exercising the option.
2. Submit an email request: You can give up your exercise rights by sending an email to bbae@rbsecurities.com at least three hours prior to the market close. Be sure to follow the format provided below and send the email from your registered account:
Subject: 7XJ00000 – Give-up Options Exercise - 3 contracts of ABC290122C300
Message Body: My account number is 7XJ00000. I want to give up my exercise rights on ABC290122C300 for 3 option contracts. I acknowledge the risk of forgoing my exercise rights and that the option contract(s) will expire worthless.
By giving up your exercise rights, you are forgoing the opportunity to buy (for call options) or sell (for put options) the underlying stock at the predetermined strike price. This means that you will not be able to capitalize on any favorable price movements of the underlying stock. Additionally, if you give up your exercise rights, your in-the-money options contract(s) will expire worthless.
In summary, giving up exercise rights can impact your options positions and potential profits. Be sure to carefully consider these risks before requesting to give up your exercise rights. This decision can have significant consequences on your investment strategy, so it's essential to weigh the potential benefits and drawbacks before taking any action.