Video instructions and help with filling out and completing Will Form 5495 Expiration

Instructions and Help about Will Form 5495 Expiration

Hey everyone this is Kirk here again at option alpha comm in this video we're gonna go through the entire options expiration and assignment process and basically give you a rundown on everything that you need to know now for new traders expiration and assignment can be a little scary and confusing and I get that but in today's video we're going to break it down in simple bite-sized chunks that give you a clear understanding of how it all works and again clear understanding equals confidence in what you're going to be doing as you start getting deeper and deeper into options trading first it's important that we remember that options contracts have a finite expiration date and that they are derivatives of underlying stocks or ETFs or indexes and therefore they're regulated differently than an actual stock so I first want to introduce options expiration assignment by talking about the options Clearing Corp or OCC now this is the company regulatory body whatever you want to call them that's jointly owned by all the exchanges that trade options and they issue all the options and control and all the effects and controls and effects all exercises and assignments and what's really important to understand about the OCC is that they basically guarantee all trades by acting as a counterparty to any purchase or sale of options there by providing a liquid market to trade now I'll get to a low graph here in a second that kind of describes what OCC is but again it's there acting as a counterparty to guarantee all trades they're not acting as the other person that you're trading with so for example you're not if you're an option buyer you're not buying options directly from the OCC they're not going to be the other party involved you're still going to be buying options from an options seller but the OCC is gonna kind of be the person in between there that guarantees that if one party doesn't pay or can't provide payment that the other party is made whole so that you know if you buy an option or sell an option and make money on that trade that someone is going to be there to pay those profits to you so the OCC like other clearing companies is the direct participant in every purchase and sale of an option contract again they act as kind of the go-between they kind of barrier between an option buyer and option seller but again they guarantee everything that's what's really important here so here's a quick little graphic we've we've gone over before but it's worth going over again again if you are an option buyer in this case then what you would want to do is you would want to submit payment to the OCC okay again they're acting as not the middleman but as the clearing part of it to guarantee the trade they give that payment to the option writer or the option seller the option writer then gives the OCC their option contract which then delivers the option contract to you now this all happens in a split second right and everything that we do an options trading happens in a split second but in the case of this video what's important to know is that there is an intermediary here that guarantees payment and liquidity so if there's an option writer and there's an option buyer or an option seller an option buyer doesn't matter someone is going to be there to guarantee that if this person decides they can't pay don't have enough money in their account whatever the case is for some weird reason that they can't do it OCC will make you whole and that's really the key part here now remember options are expiration dates we usually show these here at option alpha on with the vertical lines on our charts there's ways you can do that on a lot of different Broker platforms I like to visually see it by you know showing these like vertical green or vertical red lines on my chart but you can consider these kind of like the make-or-break points right so for right now the time that we did this video we took this screenshot here of a stock and you can see this is where it's trading and basically these are the different options expiration dates so you could have the monthly dates you could have weekly dates but basically this is the time frame that you need the stock to move before you can either make money or not right so that's what's really important about option expiration dates again we've got a great little calendar and resource guide here on option alpha that you can download we usually have this current year plus a couple current years out into the future if you ever wanted to check that out again it's completely free the one that we use gives you all of the market holidays as well so it's very easy so like for example January 1st that's New Year's that's gonna be a market holiday and then we've got you know March if there's a market holiday there or whatever the case is and it also gives you the expiration dates for the monthly contracts and the quarterly contracts so in this case this is going to be the actual expiration date for monthly contracts in January again it's always the third Friday in the month for the monthly contracts that's the expiration date the expiration date or the date that they actually expire and everything transfers over is actually that following Saturday so that always happens on the following Saturday so again really cool resource again 100% free here at option alpha so a couple little quick tips before we get into the exercise and assignment process for options again expiration day for equity and index options is the Saturday immediately following