It would be nice if this referred to a system that allowed your body to workout while your mind did something else - sleeping, reading, watching TV, dreaming of chocolate cake, etc. Just imagine doing 1,000 crunches a day without ever realizing it...Alas, automatic exercise has to do with the options market instead.
First, let's set out a few basics. An option is a contract that gives you the right to do something (like buy a stock) but not the obligation. So if you hold an option to buy a stock at a certain price and the stock never reaches that price, you don't have to exercise it. You can just let it sit. However, if the stock rises above that price, you can cash in the option and make a profit.
A couple more background items that come into play here: 1) In-the-money options are options that are profitable. 2) Every option has an expiration date.
Now just imagine if you have an option that's in the money, except you fail to exercise the option by its expiration date. So the option dies a worthless death, while you blithely watch cat videos on YouTube.
Automatic exercise prevents this. By setting up an automatic exercise, in-the-money options will get exercised without the option holding giving explicit instructions. This avoids any expensive oopsies and allows traders to be as distracted as they want to be.
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Finance: What are Limit Order, Sell Limi...4 Views
Finance a la shmoop what is a limit order? you want to sell a thousand shares
of Colonel electric it was demoted after they cut their dividend the shares have [Scissors cuts dividend in half]
been trading wildly between $15 and $25 a share you don't want to feel like a
moron for having sold them at fifteen bucks when six weeks later they kissed
25 with tongue so what do you do well you put in a limit order that is you put
a limit of a minimum price of 25 bucks a share for Colonel Electric such that [Pile of stocks appear]
those shares will simply sit in your account unsold maybe forever until
somebody out in the wild blue yonder of Stockland is willing to pay twenty five [Woman standing at a colonel electric stand]
dollars or more for the shares where you have a minimum price limit of 25 bucks a
share in your order so here's to hoping they sell and don't get further demoted [Man carries stock into car]
Sargent Electric is just a place you don't want to go
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