This letter includes a portion about exercising OTM options which can be removed starting at “Additionally, under OCC Memo 50180” and ending with “Put Options regardless of internally estimated moneyness.”. We are not attorneys, this is not legal advice, this is a template provided as an example of a letter I am sending as a retail investor. Send this letter at your own risk. Should you choose to do so, customize it to fit your broker, your options positions and your account #.
TD Ameritrade
Division of TD Ameritrade Inc.
P.O. Box 2209
Omaha, NE
Facsimile No. 866-468-6268
clientservices@tdameritrade.com
TD Ameritrade Clearing, Inc.
P.O. Box 2209
Omaha, NE
Facsimile No. 866-468-6268
clientservices@tdameritrade.com
RE: Instructions for Exercise of Put Options with Expiration Date of March 18, 2022
Acct # _________
To Whom It May Concern:
I am a customer of TD Ameritrade Inc. and/or TD Ameritrade Clearing, Inc. (collectively, “TD”). I am the owner and holder of the Account described above. As of the date of this letter, the Account holds the following put options:
-5x Ozon Holdings PLC (NASDAQ:OZON) $10 Put Option Contract Expiration Date 03-18-2022
-11x VanEck Russia ETF (CBOE:RSX) $7 Put Option Contract Expiration Date 03-18-2022
-11x VanEck Russia ETF (CBOE:RSX) $5.5 Put Option Contract Expiration Date 03-18-2022
(collectively, the “Put Options”).
This letter shall serve as notice that TD is hereby directed and ordered to exercise the Put Options prior to market close on Friday, March 18, 2022. TD is further instructed to inform the Options Clearing Corporation that I have exercised the Put Options. I demand that I receive copies of such transmittals in writing from TD within three (3) business days of the date of this letter.
Under Options Clearing Corporation (“OCC”) Memos 50188 and 50190, “If it is not possible for the delivering Clearing Member to effect delivery of the OZON [and/or RSX] American Depositary Shares on the designated settlement date, then the settlement obligations of both delivering and receiving Members shall be delayed until such time as OCC designates a new exercise settlement date, settlement method and/or settlement value.”
TD is hereby instructed, directed and ordered to inform the OCC and other Clearing Members that it is not possible for TD to effect delivery of the OZON and RSX shares on the designated settlement date for the Put Options because the exchanges have halted trading on both OZON and RSX and, accordingly, TD is unable to acquire shares for delivery.
Provided TD is unable to acquire shares, a short position is not possible and alternative settlement as provided for in the above-mentioned memos will be required. Therefore, I demand TD remove any restriction on my ability to exercise the Put Options relating to my accounts ability or inability to open and maintain a short position.
Should TD deem themselves able to acquire shares for OZON or RSX, and thus refusing to comply with the instructions herein, I hereby demand evidence of the source of such shares including but not limited to the complete list of holding entities, quoted fees to borrow and availability for the past two weeks beginning on March 7th, 2022.
Additionally, under OCC Memo 50180, “Holders of long positions in these affected options will need to make independent determinations of the value of the option deliverables in deciding to exercise, or not exercise, any expiring long position.”
Considering that RSX is an ETF with a NAV that is consistently updated by VanEck Associates Corporation (“VanEck”) regardless of the stocks trading status, it is the most reasonable and accurate figure to use in the valuation of the Put Options. The NAV for RSX at the time of exercise rests at $0.32 per share, therefore I have independently determined that all of my RSX options should be exercised as they are all in the money and I hereby demand TD comply with this determination and exercise all the Put Options regardless of internally estimated moneyness.
Please take notice that, unless TD provides me a response in writing that it is refusing to follow my instructions, TD will be presumed to have accepted my instructions and clearly understood my instructions.
Failure to comply with these instructions may result in a breach of the Client Agreement, all other applicable agreements between me and TD, breach of the covenant of good faith and fair dealing, breach of applicable federal and state rules and regulations governing securities or the Account, or other claims and causes of action that may arise under applicable law. All such claims, causes of action, rights and remedies are hereby expressly preserved. This letter also includes language designed to covering exercising from a cash account.
Please respond to this letter immediately.
Sincerely,
And here is a response template for if they send a refusal.
Thank you for your reply,
It is your duty as my broker to communicate to the OCC that I have the intent to exercise all of my contracts regardless of whether or not you have decided to comply fully with my request. Please ensure that this is done immediately. Given the fluidity and unprecedented nature of the situation I would expect that you, as my broker, are taking all necessary steps to provide me a fair and equal opportunity to exercise my contracts.
Your response is not in compliance with my request and I still reasonably expect my request to be honored in full.
Thank you,