To The Moon

Normally, if an option is out of the money (OTM), exercising it would only lead to a loss. So why on earth would anyone still do it? 🤯

📕Let’s peek into The Options Handbook for this surprising little nugget of knowledge…(Join the events at the end to win rewards!)🎁

▶ The Usual Case: OTM Options Expire Worthless 💲

If your option expires out of the money. For instance, a call with a strike above the stock price or a put with a strike below it, it usually isn't worth exercising.

In most instances, these options expire worthless and are removed from your account the following day.

▶ But Why Exercise An OTM Option On Purpose? 😦

1. Strategic Reasons

In rare situations, investors may still choose to exercise slightly out-of-the-money options.

For instance, if someone wants to buy a large amount of Pear Inc. shares, doing so directly in the market might increase the price.

In that case, exercising a just-barely-out-of-the-money call could result in a lower average purchase price.

2. Last-day, after-hours trading

There's also the post-close window to consider.

In U.S. markets, 0DTE option holders can still request to exercise for up to 90 minutes after the close, if there's a meaningful price move in after-hours trading.

🎉[Mini Events]🎉

How to Join

• Flip to pages 12–14 of The Options Handbook and find a knowledge point about OTM options. Snap a photo and drop it in the comments!

• Don’t have the handbook? No worries! Just share your own thoughts about OTM options in the comments and you’re in!

• Example: “OTM options look cheap, but most of them expire worthless, feels like buying lottery tickets.” (With your photo 📸)

Prizes

• 🎁Participation Reward: 10 Tiger Coins for every valid comment.

• 📓 Scholar Award: Participants who leave insightful comments will receive a free copy of The Options Handbook!

Event Period

• 📅 Sep 5, 2025 → Sep 12, 2025

• Winners announced within 10 trading days after the event.

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