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:
“... when I exclaim against novels, I mean when contrasted with those works which exercise the understanding and regulate the imagination.—For any kind of reading I think better than leaving a blank still a blank, because the mind must receive a degree of enlargement and obtain a little strength by a slight exertion of its thinking powers ...”
—Mary Wollstonecraft (1759–1797)