early exercise investment & finance definition
The exercise of an option before it expires.
Early Exercise
Investment Dictionary:
Early Exercise
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Early Exercise (assignment)
The exercise or assignment of an option contract before its expiration date.
Early Exercise
When an option or other security is exercised prior to its maturity date.
Embedded Option ...
Early Exercise (assignment) - The exercise or assignment of a futures option contract before its expiration date.
Early exercise means that the option holder pays $30 for shares currently worth $41. He then receives a dividend of $1 and continues to hold shares worth $40.
Early exercise
A feature of American-style options that allows the owner to exercise an option at any time prior to its expiration date.
Equity ...
e Early exercise The right provided by American options that allows the holder to buy or sell shares at the strike price before the expiration date. Earnings per Share A company's total earnings divided by the number of shares outstanding.
early exercise When an option or other financial security is exercised before the due date... early retirement A retirement plan provision which allows an employee to retire before the firm's...
Atlantic spread Long (short) an American option and short (long) the otherwise identical European option - hence, long (short) the value of early exercise. (Stephen R. Gould) ARGO A J.P. Morgan SPV (q.v.), originated in 1994.
An option pricing model that takes into consideration the early exercise provision of the American style options.
Many of these fears are based on their experience of owning stock and writing calls against the stock - early exercise results in their losing the stock (and incurring a taxable event if their original cost was lower).
Hi Jerry, hard to say what the odds are, but yes, they are selected at random. The chances of early exercise are higher right before a stock goes ex-dividend.
Jerry ...
An option pricing model developed by John Cox, Stephen Ross, and Mark Rubinstein that can be adopted to include effects not included in the Black-Scholes Model (e.g., early exercise and price supports).
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Covered Option ...
Cox-Ross-Rubinstein Option Pricing Model: An option pricing model developed by John Cox, Stephen Ross, and Mark Rubinstein that can be adopted to include effects not included in the Black-Scholes Model (e.g., early exercise and price supports).
Cox-Ross-Rubinstein Option Pricing Model: An option pricing logarithm developed by J. Cox, S. Ross and M. Rubinstein which can be adopted to include effects not included in the Black-Scholes model (e.g., early exercise and price supports).
In a rising interest rate environment, for example, put LEAPs can actually trade with a negative cash value. This is especially important for equity LEAPs, as there is a strong incentive for holders to choose early exercise.
 See also: Option, Exercise, Options, Stock, Market
  
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