www.amex.com/amextrader
The purpose of this Notice is to advise members and member organizations that The Options Clearing Corporation ("OCC") has received approval from the Securities and Exchange Commission ("SEC") to reduce the threshold amount used to determine the equity options that are deemed to be in-the-money for purposes of Exercise-by-Exception ("Ex-by-Ex") processing on expiration.
The new threshold will be $0.01 for equity options in all accounts (i.e., in customer, firm and market maker accounts) effective for the standard equity expiration on June 21, 2008, and all equity expirations thereafter.
Therefore, equity options that are in the money by $0.01 or more at expiration will be exercised automatically unless the clearing member instructs otherwise, pursuant to a "do not exercise" instruction. This change reduces the threshold from $0.05 for equity options in all accounts.
Members must continue to adhere to the procedures and cut-off times, pursuant to Amex Rule 980, which have not changed. Option holders desiring to exercise or not exercise expiring options must either (i) take no action and allow exercise determinations to be made in accordance with OCC's Ex-by-Ex procedure; or (ii) submit a "Contrary Exercise Advice" to the Amex by the appropriate deadline, as well as any other notifications to the clearing firm or to OCC, as applicable.
Please direct any questions about this Notice to Rick Farber at 212-306-5310.