Common use of Option Trading Clause in Contracts

Option Trading. The Client understands that some exchanges and clearing houses have established cut-off times for the tender of exercise instructions and that an option will become worthless if instructions are not delivered before such expiration time. The Client also understands that certain exchanges and clearing houses automatically will exercise some “in-the-money” options unless instructed otherwise. The Client acknowledges full responsibility for taking action either to exercise or to prevent the exercise of an option contract, as the case may be; CIF is not required to take any action with respect to an option contract, including without limitation any action to exercise a valuable option prior to its expiration date or to prevent the automatic exercise of an option, except upon the Client’s express instructions. The Client further understands that CIF has established exercise cut-off times, which may be different from the times established by exchanges and clearing houses.