Options Expiration & 0 DTE FAQ

When do opening options orders stop on expiration day?

For stocks and most equity options: 3:15 PM ET. For broad-based ETFs (e.g. SPY, QQQ): 3:30 PM ET. Opening orders after the cutoff are rejected.

What is auto-liquidation?

Auto-liquidation is Alpaca’s expiration-day risk process that closes at-risk option positions when the client’s account does not have enough buying power or shares to support exercise or assignment. It reduces the chance of an unfunded exercise or assignment. Auto-liquidation is best efforts; the account owner remains responsible for managing expiration risk.

When does auto-liquidation start?

Typically 3:30 PM ET for stocks and equity options. For broad-based ETFs: 3:45 PM ET.

What positions are at risk of auto-liquidation?

Options with a strike price of about 0.5% of the underlying market price (slightly ITM or OTM) when the client’s account cannot support exercise or assignment. Although rare, this 0.5% threshold is subject to change based on underlying market conditions.

Can my correspondent code be set to always liquidate long options at expiration?

Yes. Contact Alpaca to enable always-liquidate for long options on your correspondent. This is a universal setting based on the correspondent code; it applies to all accounts under that correspondent, not a per-account setting. When enabled, Alpaca liquidates long option positions at expiration regardless of whether the client’s account has enough buying power or shares to support exercise.

Can clients still close an option position after the opening cutoff time?

Yes. Closing orders are still allowed. If Alpaca needs to auto-liquidate, it may cancel a working close order and send a market order.

When is the exercise cutoff on expiration day?

After 4:00:00 PM ET, exercise requests are no longer accepted.

What is a Do Not Exercise (DNE)?

A Do Not Exercise (DNE) is a request that an in-the-money long option not be auto-exercised. Placing a DNE forgoes any remaining intrinsic value.

When should a DNE be submitted?

DNE requests should be submitted before 3:00 PM ET on expiration day. Later requests are handled on a best-efforts basis.

How do I submit a DNE?

The preferred method is through the Do Not Exercise API endpoint: POST /v1/trading/accounts/{account_id}/positions/{symbol_or_contract_id}/do-not-exercise. A DNE is not required for OTM options — only options that close $0.01 or more ITM are subject to automatic exercise.

Can I DNE a short option?

No. You can only place a DNE on long options. Short option holders have the obligation to deliver if the counterparty exercises.

How do I exercise an option via the Broker API?

Early exercise requests may be submitted through Broker API using the Exercise an Options Position endpoint: POST /v1/trading/accounts/{account_id}/positions/{symbol_or_contract_id}/exercise.

What is automatic exercise?

ITM long options by ≥ $0.01 are generally exercised after the close if the client’s account can support deliverables. Long calls and short puts need buying power to purchase 100 shares per contract; long puts and short calls need available shares (shares used for a covered call do not count as available for long puts at the same time).

When are options auto-exercised?

Long options ITM by at least $0.01 versus the official close are subject to automatic exercise.

What if the client’s account does not have buying power to exercise?

Close before the sellout window, or Alpaca may auto-liquidate. If the option cannot be sold, Alpaca may place a DNE on the long contract after market close. The account owner remains responsible for any resulting balances.

When do exercise and assignments show up?

Exercise/assignment activity typically posts the same evening around 9:00pm ET. This time is subject to change depending on when we receive assignment information from the OCC.

What happens to short options at expiration?

ITM short options are typically assigned; OTM shorts usually expire. Assignment is not certain until the OCC confirms. Short Option positions closed before market close cannot be assigned.

How do index options differ at expiration?

They are European-style and cash-settled (no shares). No early exercise or DNE. All multi-leg legs must share one expiration. SPXW/XSP 0DTE stop trading at 4:00 PM ET on expiration day. They generally are not in equity American-style option sellout logic. To enable Index Options trading please contact Alpaca.

Does Alpaca support 0 DTE options?

Yes. Same-day expiring contracts can be opened until the opening cutoffs above.

What happens to open opening orders at the cutoff?

Alpaca cancels opening orders on contracts expiring that day. Closing orders can remain working.

Are there option order limits?

Yes. Up to 1,000 contracts per order or $50M notional of the underlying market price.

Why was a client’s option liquidated on expiration?

Alpaca may liquidate expiring options if they are ITM or near the money, and the client’s account did not have enough buying power or shares to support exercise or assignment. Auto-liquidation is best efforts; the account owner remains responsible for managing expiration risk.

Will far OTM options be liquidated?

Generally no. Far OTM longs are not liquidated for possible after-close moves. Near-ATM shorts can still be liquidated if assignment would leave an unsupported stock position. An OTM short option may also be liquidated if it is part of a spread and the corresponding long option is within our liquidation threshold and at risk, to avoid leaving the client’s account with an uncovered short option.

Does Alpaca allow exercise or assignment that would result in a short stock position?

No. Alpaca does not allow exercise or assignment that would result in a short stock position. If exercise or assignment would result in a short stock position, Alpaca may liquidate the option regardless of buying power.

How do I identify an auto-liquidation order placed by Alpaca?

Order source alpaca::auto_liquidate indicates systematic liquidation. Additionally, sellouts by Alpaca may show source as admin.

How are spreads handled on expiration when both legs are ITM by more than 0.5%?

For spreads where all legs are more than 0.5% ITM, Alpaca allows exercise of the long and assignment of the short, processed simultaneously.

How are spreads handled on expiration when both legs are OTM by more than 0.5%?

For spreads where all legs are more than 0.5% OTM, auto liquidation generally will not occur and the spread will expire worthless.

How are spreads handled on expiration when the underlying is between the strikes, or either/both legs are within 0.5% of a strike?

For debit spreads, Alpaca liquidates the full spread. For credit spreads, if both legs are within 0.5% of a strike, Alpaca liquidates the full spread; if only the short leg is within 0.5% and the long is OTM by more than 0.5%, Alpaca liquidates the short only and allows the long leg to expire.

Should clients close options before the sellout window?

Yes. Closing option positions before the sellout window is the best way to control the exit. For spreads, closing with a multi-leg order is preferred. Auto-liquidation is best efforts; the account owner remains responsible for managing expiration risk.

Options trading is not suitable for all investors due to its inherent high risk, which can potentially result in significant losses. Certain complex options strategies carry additional risk. Please read Characteristics and Risks of Standardized Options before investing in options.