Monday, June 16, 2014

Document me this ...

"The representations of the defendants again contradicts the promotional material, posted for Canadian consumption 24/7/365 over the past four years.

“Options that are "in-the-money" will be auto-exercised; however if you choose not to exercise the option, your only cost is the premium.”

The Canadian Derivatives Clearing Corporation (CDCC) is the issuer, clearing house, and guarantor of equity options in Canada. CDCC rules governing the exercise of “in-the-money” equity options at expiry is clear.

“Under CDCC current rules all Equity, Bond and Index options in client accounts that are in-the-money by .01 or more are automatically exercised.”

What CIBC is telling the public regarding the exercise of "in-the-money" equity options at expiry ...

" the options were not exercised for the following reason. To auto exercise would have represented an ECA short position of 2000 shares and a margin requirement of $ 15,000. As no margin was available in your account at that time, no exercise was initiated."