Exercising the option can best be defined as:
A) The act of buying or selling the underlying asset via the option contract.
B) The fixed price in the option contract at which the holder can buy or sell the underlying asset. Also the exercise price or strike price.
C) The last day on which an option can be exercised.
D) The change in the stock price divided by the change in the call price.
E) A feature included in the terms of a new issue of debt or preferred shares to make the issue more attractive to initial investors.

Question

Quizplus · Accepted Answer

Exercising the option refers to the act of the option holder choosing to buy or sell the underlying asset as per the terms of the option contract. This is what happens when an option is exercised.

Exercising the Option Can Best Be Defined As