What happens if my option expires with the strike price in between the bid/ask?

External question — Personal Finance Stack Exchange Author: Allure Original post: https://money.stackexchange.com/questions/166060 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Say I sell a put option on XX stock expiring today, with strike price $100. At the end of the trading day today, the bid price is $99.95, and the ask price is $100.05. Is my option in the money or not? Do I end up with 100 shares and have to pay $10,000?

External answer — Personal Finance Stack Exchange Author: Hart CO Original post: https://money.stackexchange.com/a/166061 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Last traded price is what gets used for automatic exercise decision at expiration. Typically that means the last traded price before market close (4pm ET) but there are exceptions (SPX am expirations, for example).

External answer — Personal Finance Stack Exchange Author: Bob Baerker Original post: https://money.stackexchange.com/a/166062 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The OCC uses a "composite closing price" which is the last reported sale price of the underlying security during regular trading hours on the expiration date as reported by industry price vendors. You can google for the OCC memo that explains this in greater detail. The closing price isn't the only reason for assignment of short options. If the underlying trades in-the-money prior to the close on expiration day, owners of options may submit exercise notices. Since American-style options can be exercised until 5:30 pm EST (brokerage firms may have earlier cut off times), options that finish out-of-the-money at the close of regular hours trading may be exercised if they are in-the-money after 4 pm.