Zeev's Turnips Patch-No Politics (ZEEV)

[Bruce A Thompson]

Update on the COMPX Options Saga

I sent the following email to both the PHLX and Options Clearing Corp today:

Hello,

I currently hold 2 contracts for the Sept 2200 COMPX Call options. (MTJIT) I am a little concerned about the selling of these options due to the thin market.

I am researching the possibility of exercising instead of selling. I fully understand the difference between American vs European exercise.

My broker advises me that I would have to buy the underlying securities and then resell them to complete the exercise transaction. This would require me to have $440,000 cleared cash in my account.

I have read the OCC pamphlet and it seems to indicate that these options are all cash and do not have an underlying security to buy. It also seems to indicate that exercising would mean that the OCC would pay off the options and send a bill to one or more of the sellers that sold them short.

Could you please explain to me what the actual transaction of exercising would involve in a way that makes it clear to both me and to my broker. Specifically answer please, would I have to put up $440,000 to exercise these options?

Thank you,

BT