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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


When you act on a buying or selling opportunity that you have been granted under the terms of a contract, you are said to exercise a right.

Contracts may include the right to exchange stock options for stock, buy stock at a specific price, or buy or sell the security or product underlying an option at a specific exercise price.

For example, if you buy a call option giving you the right to buy stock at $50 a share, and the market price jumps to $60 a share, you'd likely exercise your option to buy at the lower price.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
An exercise-and-hold strategy carries investment risk (what is paid to exercise the option), along with a tax-prepayment risk.
Exercise enthusiasts must recognize that, while it's sometimes all right to exercise with a cold, the intensity of a workout must be toned down considerably.
On completion of harbour phase, next phase of the Exercise will include joint naval operations at sea.
"Here we have shown that intermittent exercise seems to improve the glucose profiles of type 2 diabetics with a greater positive effect when intermittent exercise is combined with mild hypoxia, similar to doing the exercise at altitudes of 2500 meters," Mackenzie added.
He has published extensively in this area and is the author of one of the authoritative textbooks in this field, A Primer for Exercise and Nutritional Sciences: Thermodynamics, Bioenergetics, and Metabolism.
Those who report more days of exercise also report higher scores on the Gallup-Healthways Emotional Health Index.
Gentle stretches can warm up your muscles before exercise. They can also improve your balance and flexibility.
The preamble states that Treasury and the Service believe there is no substantive difference between Simpson (in which property passed pursuant to the exercise of a GPA) and Peterson (in which property passed pursuant to the lapse of a GPA).
However, the exercise-informed women perceived themselves to be getting markedly more exercise than they had indicated before the presentation.
Finally, student perceptions about using PBL to teach exercise physiology, collected on anonymous course evaluations were assessed.
Perform these exercises on a day reserved for crosstraining, or after your warm-up when you are still fresh.
To work in the field of cardiac rehab, we learned how to use graded exercise (stress) tests to develop exercise prescriptions with individualized minimum and maximum target heart rates (target zones).