Exercise
Using an option’s right to buy or sell the shares at the strike.
To exercise a call is to buy the shares at the strike; to exercise a put is to sell them at the strike. Option buyers exercise; option sellers get assigned as a result. In the US, in-the-money options are exercised automatically at expiration, so you rarely have to do it by hand.
For example
You own a $50 call and the stock is at $58. You exercise to buy 100 shares at $50, then you can sell them at $58 for an $8-per-share gain (minus what you paid for the call).
Related terms
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