[TheOptionClub.com] Index Settlement Values

 

Part of my iron condor one of the short strikes on the SPX was at 1170.

I thought I was home free and it expired OTM last expiration.

I log into my account today, check out the gain\loss, and it shows it was excercised, and I had to buy it at 1172.95 and sell the shares at 1170.

I call up my broker today, ask him how it was excercised if it was out of the money at expiration, and he had me go to the CBOE site, and check out the Index Settlement Value section at http://cboe.com/data/Settlement.aspx

So, the actual price of the SPX closed at 1159.90 on the 19th, opened at 1157 on the 22nd, closed at 1165 on the 22nd.

That is a pretty big gap of almost 10 points, but yet I lost money on the trade and had to buy at 1172.95

He mentioned something about not all stocks in the S&P 500 start trading right away, so they take a random sampling to get the index settlement price.

If you didn't know about this, just a warning.

Is this the real story? I believe my broker if it's on the CBOE's site, and the price matches exactly.

Is this correct?

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