Hey everyone, this is Kirk from Option Alpha. In this video, we're going to discuss the options expiration and assignment process and break it down into simple, easy-to-understand chunks for new traders. It's common for expiration and assignment to seem confusing and scary, but with a clear understanding, you can gain confidence in your options trading. First, it's important to remember that options contracts have a finite expiration date. They are derivatives of underlying stocks, ETFs, or indexes, which means they are regulated differently from actual stocks. To introduce options expiration assignment, let's talk about the Options Clearing Corp (OCC). OCC is a regulatory body jointly owned by all the exchanges that trade options. They issue and control all options and ensure the smooth running of exercises and assignments. OCC plays a crucial role in guaranteeing all trades by acting as a counterparty. They don't directly buy or sell options, but they guarantee trades by providing a liquid market. This means that if one party fails to pay or fulfill their obligations, OCC steps in and ensures that the other party is not affected. For instance, if you buy an option and make a profit, OCC ensures that the profit is paid to you, even if the seller can't fulfill their end of the trade. OCC acts as the intermediary between option buyers and option sellers. The process happens quickly, with the buyer submitting payment to OCC, who then delivers the option contract from the seller to the buyer. This ensures payment and liquidity in options trading. Options expiration dates are crucial because they determine when you can make money or not. At Option Alpha, we visually represent expiration dates on our charts with vertical lines. These lines act as make-or-break points. The expiration dates can be monthly or weekly, and they indicate the...
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Video instructions and help with filling out and completing Will Form 5495 Expiration
