There has been a lot of speculation here on how in-the-money options will settle. This was issued yesterday by OCC:
I called Schwab to see how they are handling, but the broker wasn't clear himself. Said I need to call back on Monday for the options specialists (don't work on Saturdays). Is anybody here actually long in-the-money December options and can report facts instead of speculation? Mine are Januarys so I can't help yet. Thanks
DATE: DECEMBER 20, 2013
SUBJECT: #$%$/LLEN TRADING HALT/REMOVAL FROM EX-BY-EX PROCESSING/EXPIRATION PRICING CONSIDERATIONS
EXPIRING SERIES OF THE OPTIONS LISTED BELOW WILL NOT BE SUBJECT TO OCC’S AUTOMATIC EXERCISE THRESHOLDS IN STANDARD DECEMBER 2013 EXPIRATION PROCESSING.
Holders of long positions in these affected options will need to make independent determinations of the value of the option deliverable in deciding to exercise, or not exercise, any expiring long position. If positive instructions to exercise are not submitted to OCC by the clearing member, expiring positions will not be exercised.
For purposes of calculating a price for use in expiration processing, OCC will use the last available trading prices listed below. But, as stated above, automatic exercise thresholds will not apply.
Security Name Option Symbol Date Halted Last Trading Price of Underlying Security
FAB Universal Corporation #$%$ 11/22/13 $3.07
L & L Energy, Inc. LLEN 11/18/13 $1.68
There was no automatic exercising of in the money options. You needed to manually submit instructions to OCC.