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Related to Exercise the Option: call option, European call option


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.


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.


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.


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.

References in periodicals archive ?
Should Wayside purchase the NPI and not exercise the Option, the NPI interest will be cancelled and become part of the Properties and any expenditure to purchase the NPI will be credited to the exploration expenditure obligations of the Wayside under the First Option Agreement.
EVI may exercise the Option by paying PEI a non-refundable deposit of Cdn $200,000 (the "Deposit") no later than the Option Expiration Date.
It would also require corporations that provide ISOs as compensation to furnish workers who exercise the options with a Form 1099-like declaration of their expected tax liability by January 31 of the following year.
Because Jane can exercise the options before the stock vests, her available strategies are:
But, instead of rising in price, the stock drops substantially and is now worth less than what you paid to exercise the options.
Alternatively, the employee spouse could avoid transferring the legal ownership of the options and simply agree to exercise the options in response to a demand by the non-employee spouse.
That's because when you exercise the options, the difference between the grant price and the fair market value is taxed immediately as ``ordinary'' income.