The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer a question which is – “What's the point of leaving out of the money options on to expire worthless?” If you've been following any of the trades that we typically like to do, we do a lot of spread type trading, whether it's iron condors, credit spreads, iron butterflies, etcetera and sometimes when we get into these positions, we will exit the positions by just simply buying back the inside strikes. For example, if we’re doing an iron condor, we’ll buy back the short call and the short put and we’ll leave the outside out of the money options on to expire worthless. Now, why do we do this? Well, in many cases, when we do this, we’re doing this when those out of the money options are not worth any value anyway. They were added as protection, they were added for a very cheap premium and they still are probably worth almost no premium at all, so it might take a little bit more time to fill if we