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It would help if you would be more specific about which markets you are
talking about. To my knowledge the hold/owner of an option, ie the person
long, is the only one who can exercise an option prior to expiration.
The very definition of an option is "it gives the buyer the right, but not the
obligation to buy or sell an instrument at a specific price" at any time
between now and the expiration of the option contracts. European style
options only allow exercise at expiration. American style options can be
exercised at any time.
The only time you need to be worried about being assigned a futures position
is when you are short an option, not when you are long one. If you can site a
specific market, and a specific class of option, it would be most helpful.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
In a message dated 8/28/98 11:31:35 AM Central Daylight Time,
deltaforce@xxxxxxxxxxxxx writes:
<< AAAAHhhhhhh.... HERE is the misconception which is absolutely untrue; that
you can't "be forced to exercise a long option position."
The catch is whether the option is In-The-Money or not. If it is, it can be
randomly exercised... even if you are long! The reason, ostensibly, is that
since these are illiquid relative to ATM options, the individuals on the
floor will sometimes want to "close" the open positions in their accounts to
avoid surprises going into expiration. The exchange rules have been set up
to allow this to happen. Granted, this type of exercise is more rare, and
the key is how FAR ITM your option is... but it does happen without anybody
screwing up. >>
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