If I own a contract of options which stands on an advantageous position (eg. 45 call options with the underlying stock at $50) and for odd reason (eg. forgot to exercise or sell the options) if it does not get exercised or sold before the expiry deadline, is there a way to recover this contract for the profit? Is the expiry date the hard-solid deadline before the options become worthless?Can you please provide some strategies to avoid this situation?Also, another situation i'm curious about is when the online brokerage server goes down on the options expiration day (usually 3rd Friday) which makes the option trading or exercising impossible. Are the traders liable for the loss?

There is an auto-exercise point but I can't remember what it is. I thought it was like 1.50 or 2.00 in the money, but I can't remember. The option expiration date is the third Saturday of the month no exceptions and there is no recovery process that i've ever heard of aside from what I mention above. Check the Chicago Board of Options website for more details.Assuming you have American exercise option why don't you exercise them the day before? You don't have to wait until the last day (unless they are European options). Also, if the brokerage server goes down call them - they have to execute your order no matter what. They would be at fault if they couldn't and you could claim them for the amount you lost. I would set reminders in your cell phone or email system to check your options on the Monday before expiration. That way you have all week to remember, although, if you are trading options I would be looking at them everyday.

(I assume that you are referring to long options contracts, since in-the-money short contracts will be automatically assigned by the OCC upon expiration.)In direct answer to your questions:- No - once expiration-Saturday has come-and-gone, there is no way to recover the contract for profit;- Yes - the expiration date is a "hard-solid deadline".Using personal illustration - yes, some time ago, I had some profitable in-the-money long calls that expired worthless because I forgot to either sell or exercise them. (They were $0.50 in-the-money.)HOWEVER - In September 2006, the OCC (Option Clearing Corporation) set automatic exercise thresholds of ALL options contracts, both long and short. And SOME brokerages also have had there OWN policies/protocols for automatic exercise of long options as a way to protect their clients (you need to ask your particular brokerage for info.) I have heard and seen different thresholds mentioned: $0.05, $0.25, $0.75 in-the-money for automatic exercise (see below).NOW, the OCC will automatically exercise your long call (or put) options on the expiration date and you will be PURCHASING the underlying stock at $45 per share (using your example). This is similar to the auto-exercise of puts and calls on indexes, that are automatically cash-settled at execution - there is no worry about remembering to close-out the positions.The PROBLEM that can occur is if your account does not have the margin or buying power to actually BUY the appropriate number of shares at $45. My understanding is that, in this case, your brokerage will "break the trade" if you cannot come up with the appropriate margin or cash.Again, a personal illustration - earlier this year, I just let some long calls be auto-exercised so that I ended up with the underlying stock (but first I made sure that I had the margin to do it).Strategies: you should get in the habit of ALWAYS checking with your broker for any open option positions the week of expiration. You can ask your broker to remind you, but don't depend on that - remember, it's YOUR money at stake! You MAY be able to give instructions or "standing orders" to your broker or brokerage to close any open option positions on expiration-Friday (or last business day before actual expiration), but the same caution applies - it's YOUR money at stake.In answer to the other situation - the answer depends upon the specific language in the contract that you signed when you opened the account with the online brokerage, and whether they have human brokers available to take telephone orders to close or exercise option positions - it is very possible that they are not liable in such a situation! READ YOUR CONTRACT.But let's say that they DO have human brokers available - in which case, it is probably YOUR responsibility to call one of them and place a telephone order to either close or exercise the options.BTW - "options expiration day" is the Saturday following the third Friday of each month - which means that the third Friday is (usually) the last business day to close your position. (Exceptions for Good Friday or other market closures, in which case the last business day would be Thursday.)====================Automatic ExerciseA protection procedure whereby the Options Clearing Corporation attempts to protect the holder of an expiring in-the-money option by automatically exercising the option on behalf of the holder.http://www.cboe.com/LearnCenter/Glossary.aspxhttp://www.cboe.com/LearnCenter/workbench/frames/MainFrame.htm... Individual investors may be automatically assigned or exercised at expiration by The Options Clearing Corporation if the option is 0.75 or more in the money. Also, most brokerage firms have rules under which options will be automatically exercised; check with your broker to determine which automatic exercise rule may apply. http://www.888options.com/help/faq/assignment.jspQ: ... My broker told me that calls are "automatically" assigned when they are a certain amount in the money at expiration. Is there is a way that I can avoid being assigned?A: While each firm may have their own thresholds, the Option Clearing Corporation's auto exercise threshold as of September 2006 is 5 cents (.05) in the customers account. ... Customers and Brokers should check with their firm's Operations Department to determine their company's policies regarding exercise thresholds.http://thismatter.com/money/Options/Trading-Exercise-Assignment.htmThe OCC automatically exercises any option that is in the money by at least $0.50 (automatic exercise), unless notified by the broker not to. A customer may not want to exercise an option that is only slightly in the money if the transaction costs would be greater than the net from the exercise. ... Exact procedures will depend on the broker.https://us.etrade.com/e/t/kc/oic?id=50013... The Option Clearing Corporation's auto exercise threshold is 75 cents (.75) in the customer account. The automatic exercise threshold in firm and market maker accounts is 25 cents (.25). ...