Question

If a customer buys a stock option and exercises it on the same day, when will the OCC assign an exercise notice to a writer?

A) Immediately upon exercise.
B) At the end of the trading day.
C) Within three business days.
D) It depends on the option contract terms.

Answer 1

The OCC will assign an exercise notice to the writer of a stock option when it is exercised, but the timing depends on the option contract terms.

Step-by-step explanation:

The OCC (Options Clearing Corporation) will assign an exercise notice to the writer of a stock option when it is exercised. However, the timing of when this occurs depends on the option contract terms. Some option contracts may require immediate assignment upon exercise, while others may have a settlement process that takes place at the end of the trading day or within three business days.