I have 22 contracts of 730 Feb calls on Google.  I noticed that the term "Indicates non-standard option" now appears by the "0" bid.

What does this mean? They have no value so will lose my $600.00 that I paid for them. Right?

Nor will there be any obligation from me to anything else except to let them expire, right??


R. Schmidt

1) I see no indication that this is a 'non-standard option.'  i don't know where you noticed that designation.

2) A non-standard option is one for which the 'deliverable' is not 100 shares of stock.  The deliverable is either
  • What the call owner receives upon exercising and paying 100 x the strike price
  • What the put owner sell upon exercise and collecting 100 x the strike price
An option becomes non-standard as the result of a special corporate action - and that is usually a merger. 

In other words if XYX buys ZZZ and pays $42 per share plus 0.5 shares of XYX stock, then all XYX call option owners have the right to exercise the call option, and by paying the original strike price X 100, receive $4,200  plus 50 shares of ZZZ.  The owner of an XYX call now has the right to buy $4,200 plus 50 shares of ZZZ and pay $6,000 for that package.

Similarly, the owner of an XYX 70 put option has the right to sell $4,200 plus 50 shares of ZZZ stock and collect $7.000.

3) No, that does not mean they have no value.  The reason they have no value is because they are very far out of the money and expiration day is approaching.  Yes, your $600 looks lost - but miracle do happen.

4) Right.  You may let them expire.  You are under NO obligations.  The owner of an option has rights, never obligations.

Mark D Wolfinger

Expiring Monthly: The Option Traders Journal

The Rookie's Guide to Options