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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.


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 ?
These state provisions, prohibiting most businesses from operating on the Christian Sabbath, were variously claimed to violate equal protection, due process, non-establishment, and free exercise.
The main purpose of this volume is to explore the many areas of free exercise law that have occupied federal (and sometimes state) courts, legislatures, and agencies--and to suggest reforms that will bring greater freedom, fairness, and firmness to each of these areas of law.
Where [section] 501(c)(3) has excluded religious Americans from participating in the political process leading up to the enactment of a statute, the statute may not really be neutral or equal, and therefore, under Smith, the judges have reason to question whether it is compatible with the First Amendment's Free Exercise Clause.
13) The originalist framework posits that free exercise protects a certain type of action--religious action.
6) The HHS mandate, therefore, requires these employers, who seek to implement their religious beliefs in and through their companies, to provide and pay for health coverage that violates their sincerely held religious beliefs in violation of the Free Exercise Clause of the First Amendment and RFRA.
deflation of the Free Exercise Clause was initiated by the United States
As the Court made clear in Lukumi, non-profit corporations have free exercise rights under the First Amendment.
Constitution provides, in part, that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.
While Perry justifiably expresses concern over the free exercise rights of religious groups, tipping the balance in favor of religious practice over freedom from religion raises the minority-protection problem Ackerman foresaw.
In advocating a pluralistic interpretation of the Free Exercise clause, Evans makes no pretense to have set out an original position, and like anyone who suggests that the best way forward to is balance a range of goods (both pluralism and comprehensive association), Evans is vulnerable to those who would claim that she has given no clear idea as to how one is to determine the ranking on a case-to-case basis.
The Fourth Amendment says, in part, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.
Part 2, "Problems," traces the Supreme Court's tortured "progress" in developing doctrine on the free exercise of religion, and then raises a question about America's "civic religion" (with a nod to Robert Bellah) in light of the ban on establishment of religion.