How DCS exercises exchange-traded options (ETOs)
During end of day processing, DCS automatically exercises expiring, in-the-money ETO positions. Clearing participants need to use the Member Clearing Module (MCM) to exclude the individual account from exercise before the exercise cut off time of 19:00, if they do not want it to be auto –exercised.
Note that both in-the-money and out-of-the-money long positions can be exercised. As a result, all open short positions can potentially be included in the random assignment process.