Overview

One of the challenges of options trading, especially with shorter-term contracts, is staying on top of expiry dates and ensuring you have the necessary funds or shares. To help you manage this, Wealthsimple offers an auto-sell feature. Auto-sell helps you realize the value of your "in-the-money" long options positions even when you aren't actively monitoring the market.

How auto-sell works

With auto-sell, we'll automatically try to sell any "in-the-money" long options if you don't have the shares or funds available for exercise. "Available" means you have shares or funds in your account that you aren't using as collateral for other trades. This way, you don't have to worry about losing potential gains simply because life got in the way.

Here's a breakdown of the process:

• Thirty minutes before markets close (starting at 3:30 p.m. EST, 12:30 p.m. EST on early closure days), we'll start to search for any options you have that are "in-the-money" and expiring that day.
• We'll check your accounts to see if you currently have the necessary cash or shares to exercise any expiring options.
• If you do, we'll exercise those options if they close "in-the-money".
• If you don't have the funds or shares when we check, we'll try to sell those positions for you.
• You'll receive a notification and confirmation email if your market sell order is successful.

Limitations of auto-sell

There are some cases where auto-sell is currently limited:

• Insufficient demand: If there isn't a market for an option, we can't automatically sell it on your behalf. This typically occurs in low-liquidity situations, where certain contracts don't trade very often or have a limited number of buyers and sellers.
• Last-minute inflows and outflows: We use auto-sell to check the status of your holdings at thirty minutes and ten minutes before markets close.
  • If you have the funds or shares to exercise an option at the time of the auto-sell check, but withdraw or sell them before the option is exercised, we won't automatically sell your option.
  • Conversely, if you don't have the funds or shares available when we check your account, yet you add enough funds or shares to exercise the option before market close, we will still automatically exercise your option.
• Late "in-the-money" movements: If your option contract moves from "out-of-the-money" to "in-the-money" after our auto-sell check, we will not automatically sell the option.
• Pending limit sells: If you have a pending limit sell on an options contract and your account has insufficient funds or shares to exercise it at the time of auto-sell, your contract will not be automatically sold. This ensures that auto-sell doesn't interfere with your existing trading plans. However, if you have a pending limit sell in place for the underlying shares of a put option contract and you don't have sufficient remaining shares for exercise at the time of auto-sell, we will still attempt to sell the option.
• Insufficient sale value: If the proceeds from the sale of your "in-the-money" contract would be less than the associated fees and commissions, we will not auto-sell your contract.
• Short options: We don't currently offer any kind of auto-sell ability for short option strategies such as covered calls.

Turn off auto-sell

We turn auto-sell on by default when you enable options trading in your eligible Wealthsimple trading accounts. You can switch it off at any time in the options settings.

You can turn off auto-sell in a few easy steps:

1. Log in to your Wealthsimple mobile app
2. Tap the Profile icon at the top-right of your screen
3. Select the Settings (gear) icon
4. Select Automations
5. Select Options
6. Turn off auto-sell for any of your options-enabled accounts

Related articles

• Enable options trading in your investing account
• Understand options terminology
• Buy a long option
• Sell a long option
• Sell a covered call
• Buy to close a covered call
• Manage and close options positions
• Understand options exercise and assignment
• Trade options in a margin account