Exercise of an option contract

writer11

New member
An option is exercised if the rights given to the buyer of the options contract are used. For example, if the buyer of a Call contract decides to use their right to buy the underlying security on (European style options) or at any time up to (US style options) the expiration date, they will have exercised their option. Options contracts are exercised via the exchange or options clearing system, at which time a matching options seller is chosen (by the exchange) and becomes obligated to complete the transaction.
 
Top