When approaching the expiry of a Contract Options (CO) that has a Stock as the underlying, and the option is In-The-Money (ITM) or reasonably close to be ITM, our risk system will start to calculate the cost of acquiring the underlying stocks, and reserve cash accordingly.
More specifically, 2 hours before expiry, our risk system starts reserving more and more cash, minute-for-minute. This is to ensure you have the cash required to acquire the underlying Stocks at the strike price at the time of expiry.
The cash the risk system reserves, will be shown as Initial Margin Requirement and Maintenance Margin Requirement - hence you might experience a spike in your Margin Utilization around expiry. Do note however, your account will not be stopped out based on this.
At expiry - this means:
- If the Contract Option is In-The-Money AND the you have sufficient cash to buy the underlying stock, you will be assigned on the Contract Option to buy at the strike price.
- If the Contract Option is In-The-Money AND the you do NOT have sufficient Cash to buy the underlying stock, Saxo will close-out your Contract Option position before expiry.
You can at any point in time find more details on your specific Contract Option position in the report "Closeout Report".
SaxoTraderGO: Navigate to Account > Historic Reports > Closeout Report
SaxoTraderPRO: Navigate to Menu > Historic Reports > Closeout Report