Can you sell out-of-the-money option on last day of expiration?

Question

I have a $500C Jan 29 GME option expiring tomorrow. I bought it when this contract was at $9.30. If the stock goes to say $400 or $450 tomorrow and the stock price is still under my strike price of $500 will I still be able to trade that option?
I think I should be able to trade that option for a higher price given that the stock price will increase and someone will be willing to buy that contract off me, which I think should not be a problem given the high volume. The strategy is to place a limit order and make the trade as early as possible tomorrow.
What do you guys think? What should be a good exit strategy.

Bob Baerker · Accepted Answer

You can sell an expiring equity option until 4 PM EST on the day of expiration.
What your option will be worth tomorrow morning will depend on the price of GME, how early in the morning GME rises (if it rises) and what the implied volatility will be at that time (IV is all over the map for GME).  Based on today's closing quotes, you should be able to break even if GME approaches $400 early tomorrow.
Understand that your call is heading toward a binary result tomorrow at 4 PM.  It will be worth its intrinsic value or ZERO.  Intrinsic value means whatever GME is over  $500.
Captain Obvious statement: The ideal strategy is to sell your call at its highest value tomorrow.  Unfortunately, you will not know what that price is/was until late in the day.  So if its price rises but without zooming up, you have to determine how much of your $930 you want to salvage.  Realizing a loss is a very hard for most people.  They tend to suffer from Breakevenitis.
Good luck.  Maybe you'll get lucky.

Can you sell out-of-the-money option on last day of expiration?

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