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Exercising the Option

   Also found in: Dictionary/thesaurus, Medical, Legal, Encyclopedia 0.01 sec.
Exercising the option
The act of buying or selling the underlying asset via the option contract.

Exercise
In option contracts, to buy (in the case of a call) or sell (in the case of a put) the underlying asset. The option holder has no obligation to exercise the option, and only does so if he/she believes it benefits him/her. Depending upon the nature of the option, this may be done at any point during the life of the contract, or it may only be done on the contract's expiry date. The strike price of the sale is agreed-upon in the option contract, that is, before the option is exercised.


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After weeks of speculation, it was yesterday confirmed the club wouldn't be exercising the option they had to extend the Brazilian's contract by a further two years.
Buchanan said: "Not only are we exercising the option for a further 12 months from next July, but we have signed up until 2009.
Company chiefs today revealed they are exercising the option to take 20 extra aircraft as part of the deal.
 
 
 
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