Options exercise process subject to operational risks, say experts

US dollar plane

Exercising or abandoning large client options positions is subject to significant operational risk, according to experts speaking at a session on improving operational efficiencies at the International Derivatives Expo event last week.

European or US-style vanilla options, taken by firms on behalf of their clients or by their own proprietary trading desks, are handled by operations teams through manual processes, despite the large clip sizes associated with dividend arbitrage and other

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