Put option exercise example

Calls and puts give the owner the right to buy or sell a stock at a certain price by a certain date. When the holder of that call or put option has an option that is "in-the-money" and decides to buy or sell the stock, it is said that he is "exercising" his option.

However, just because an option is "in-the-money" it doesn't mean that it is always in the best interest of the option holder to hold it. Most of the time the option holder is better off by just selling the option back at the current market price. This is because the option price is usually higher than the "intrinsic value", or the amount the option is actually "in-the-money.

How Often Do Options Get Exercised Early? | OptionsANIMAL

If you own a call option and the stock price is HIGHER than the strike price, then it makes sense for you to exercise your call. This way you can buy the stock at a lower price and immediately sell it to the market at the higher price. If you own a put option and the stock price is LOWER than the strike price, then it makes sense for you to exercise your put This way you can sell the stock at a higher price and immediately buy it back at the lower price.

Exercise (options) - Wikipedia

Example of Exercising Your Options: That is why it is called an option--it is an option and not an obligation. Here are the top 10 option concepts you should understand before making your first real trade:.

Options trade on the Chicago Board of Options Exchange and the prices are reported by the Option Pricing Reporting Authority OPRA:. What are Stock Options?

Call and Put Options Weekly Options Binary Options American Style Options European Style Options LEAP Options Index Options Call Options What are Call Options? What is a Stock Option?

How do you go about exercising a put option with less than shares? - Personal Finance & Money Stack Exchange

Call and Put Option Weekly Option Binary Option American Style Option European Style Option LEAP Option Index Option. What is a Call Option?

What is a Put Option? Make Money with Put Options Long Put Options In The Money Put Options. How To Buy Calls Selling Calls Writing Covered Calls Using A Stop Order Selling A Naked Call Selling A Naked Put Exercising An Option Options Pricing Black Scholes Valuation.

Best Option Brokers Binary Options Brokers Best Options Newsletters. Option Definitions At The Money In The Money Deep In The Money Out Of The Money Expiry Dates Ex-Dividend Dates Volatility Index. Exercising Options Related Terms: What are Call Options?

Call Option vs Put Option - Difference and Comparison | Diffen

What are Naked Puts? Here are the top 10 option concepts you should understand before making your first real trade: What is a Call?

What is a Put? Option Expiration Strike Price Understanding Option Pricing Best Discount Option Brokers Buying A Call Option Making Money with Options Exercising Options Writing Call Options. CBOE OPRA SEC OIC.