Exercise (options)
The owner of an option contract has the right to exercise it, and thus require that the financial transaction specified by the contract is to be carried out immediately between the two parties, whereupon the option contract is terminated. When exercising a call option, the owner of the option purchases the underlying shares (or commodities, fixed interest securities, etc.) at the strike price from the option seller, while for a put option, the owner of the option sells the underlying to the option seller, again at the strike price.
Read more about Exercise (options): Exercise Type, Settlement Type, Exercise Considerations, Assignment and Clearing, Exercise By Exception
Famous quotes containing the word exercise:
“That all may be so, but when I begin to exercise that power I am not conscious of the power, but only of the limitations imposed on me.”
—William Howard Taft (1857–1930)