exercise

Exercise

An action by a stockholder taking advantage of a privilege offered by a company or other financial institution. This includes warrants, options, and other exotic financial instruments.

Notes:

When you exercise your stock option, you "trade in" your options for the actual stock.

See also: Cashless Exercise, Option, Strike Price, Warrant

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Exercise

To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security.

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exercise

To require the delivery (for example, a call option) or to force the purchase (for example, a put option) of the option's underlying asset. Many options expire without being exercised because the strike price stated in the option is unfavorable to the holder.