Early Exercise

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Early Exercise (assignment)

The exercise or assignment of an option contract before its expiration date.

Early Exercise

A situation in which an option contract is exercised before its expiration date. American-style options allow early exercise, while European-style options do not.

early exercise

The exercise of an option before it expires. Although somewhat unusual, an option holder may decide on early exercise in order to receive an upcoming dividend (in the case of a stock option) or in order to satisfy another commitment.
References in periodicals archive ?
However, risk aversion may not be the only motivation for early exercise by executives.
The company president and chief executive officer, Peter Barnes, said, 'The early exercise of warrants provides Silver Wheaton with significant funds, at an attractive cost of capital, for the continued expansion of our portfolio of silver interests.
Zivney, 1991, "The Value of Early Exercise in Option Prices--An Empirical-Investigation", Journal of Financial and Quantitative Analysis, 26:129-138
Exhibit 3 extends the example to a 10-period binomial with the expectation of early exercise when the underlying share price reaches 1.
A second implication is that restrictions on early exercise may have a significant effect on the firm's ESO cost.
The early exercise program resulted in the exercise of 878,800 July 2011 warrants at $1.

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