Notice to Clients

Notice to Clients

This Notice to Clients is not exhaustive, and only provides the most basic US stock options trading instructions, Webull reserves the rights to adjust them at any time without prior notice. The risk of stock options is huge and greater than that of stock, and the price of stock options is affected by various factors, such as the underlying stock price, time value, implied volatility and so on.

Call Stock Option: A contract to buy the underlying stock at the strike price on or before expiration.

Put Stock Option: A contract to sell the underlying stock at the strike price on or before expiration.

Option Premium: the market price of the option, the amount that an investor needs to pay to buy a contract.

Trading Hour

• US’s Eastern Standard Time (EST) 9:30-16:00, some ETF options trade until EST 16:15 .

• The cutoff time to open a new position on the expiry date is EST 15:00. (unfilled orders on the expiry day will be automatically cancelled by the system as early as 15:25 EST)

• Currently for stock options trading, our system only supports open to buy and close to sell.

Type of Underlying Stock

100 shares* per contract

* In the event of corporate actions such as stock splits, the number of shares per contract may not be 100 shares

https://www.nyse.com/products/options-nyse-american-short-term

Expiry Date

• Usually weekly (Friday), monthly (the third Friday of each month). When the expiry date is not a trade day, the date will be adjusted accordingly. For example, when Friday is not a trade day, the expiration time will be adjusted to Thursday before. When some of the underlying stock need to be adjusted due to corporate actions (such as delisting, etc.), stock options may be expired early.

Exercise Stock Options

• Webull is not responsible for enquiring whether clients will exercise stock options or not. If client decided not to exercise the stock options (Long Call or Long Put) on the expiry day, client must give instruction of “Do Not Exercise On or Before Expiry” (DNE) through APP before 15:25 EST on a trading day, otherwise the stock options will be automatically exercised if the exercise conditions are met.

• If client's account does not have enough cash or purchasing power to buy the relevant underlying stock (applicable to Long Call stock options) or does not hold enough relevant underlying stock for settlement (applicable to Long Put stock options) on the expiry day, as a result, that stock options, which are not marked as DNE, cannot be automatically exercised. In this situation, Webull will have full discretion to decide how to handle that options, including but not limited to: exercising that options for the client, not exercising options for the client (and marking them as DNE), or closing out all positions of that options before market close.

• Webull will not bear any responsibility for any losses by clients due to this automatic exercise and override of such automatic exercise.

Early Exercise

• Webull does not support early exercise currently.

Do Not Exercise（DNE）

• If client does not plan to exercise (some or all positions of) the stock options, he should give DNE instruction for that options through APP or close out relevant positions of that options by himself before the market close.

• Clients can change the DNE status of stock options at any time before 15:25 EST on the expiry day.

• Clients can mark the stock options as DNE no later than 15:25 EST on the expiry day.

• On expiry day, all positions of stock options marked with the DNE flag will not enter the automatic exercise procedure regardless of whether the options is in-the-money, out-of-the-money or at-the-money.

• If client's account does not have enough cash or purchasing power to buy the relevant underlying stock (applicable to Long Call stock options) or does not hold enough relevant underlying stock for settlement (applicable to Long Put stock options) on the expiry day, but that options still have residual value on the expiry day, in this situation, Webull will choose closing out all positions of that options before expiry first (such liquidation may happen as early as EST 15:25 on the expiry day) even it is marked as DNE, so as to protect client’s interest.

• If Webull needs to close out positions of stock options on the expiry day but it is unable to do so, then Webull will mark that options as DNE on behalf of relevant client.

Exercise on expiry day:

• If a client holds call or put stock options in long positions and meets ALL the following conditions before 15:25 EST on the expiry day, that options will be automatically exercised by US stock clearing house.

a) Value of that in-the-money stock options is USD0.01 or above (subject to the announcement of US stock clearing house) which means that the strike price of the call stock options is at least USD0.01 lower than the closing price of the underlying stock during the regular trading hours on the expiry day, or the strike price of the put option is at least USD0.01 higher than the closing price of the underlying stock during the regular trading hours on the expiry day;

b) The client’s account has enough cash or purchasing power to buy the relevant underlying stock (applicable to Long Call stock options) or hold enough relevant underlying stock for settlement (applicable to Long Put stock options);

c) The client has not given DNE instruction to Webull for that options; and

d) That options has not been marked as DNE by Webull.