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:
“Children in home-school conflict situations often receive a double message from their parents: “The school is the hope for your future, listen, be good and learn” and “the school is your enemy. . . .” Children who receive the “school is the enemy” message often go after the enemy—act up, undermine the teacher, undermine the school program, or otherwise exercise their veto power.”
—James P. Comer (20th century)