The autotrading platform has different protocols for expiring positions based on their moneyness and your broker’s guidelines.
Option Alpha does not close options positions that are out-of-the-money (OTM) on expiration day. Contracts that expire OTM are worthless and you will realize the full loss for long positions or realize the full profit for short positions.
Bot's will automatically release all In The Money (ITM) positions at 3:50 pm ET on the day of the contract expiration. Out of The Money (OTM) positions will not be released and will be left to expire at market close. It is the sole responsibility of the trader to update the ending value of their position using the Position Editing function and to ensure the bot's performance accurately reflects the outcome of expired positions that were released due to being In The Money.
Generally, early closure rules depend on whether the account has the funds to cover an assignment, whether the position is ITM, OTM, or ATM, and the account type where the expiring position is held. Check with your broker for more information.
If you want to take assignment of an expiring position, you must manually override the position, transfering management from the bot.
Bots are unaware when an assignment occurs in your brokerage account. The autotrading platform tracks and manages positions independent of the broker. The autotrading platform submits a buy to close or sell to close order and lets the broker perform reconciliation of whether or not the order is valid (overlapping strikes, invalid position quantity, etc.)
The broker reconciles a buy to close or sell to close order against existing positions. Buy to close or sell to close orders do not automatically reverse if the position does not exist (go long or short instead). Instead, the orders will generate an error message.
If the autotrading platform attempts to close a position that has been assigned, the bot will receive an error message for the closing order, and no action will be taken.
Users must use the broker platform to manage the assigned shares and any remaining option legs.