Talk:Exercise (options)

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Condition for put early exercise

The condition for early exercise of an American put was removed - not sure why since no explanation was given. I think it's useful to understand this condition. Ronnotel 02:56, 19 November 2006 (UTC)[reply]

If you exercise a put option in a way that gives you a short position, you'd be *paying* not earning interest, and so this is a reason *not* to exercise a put option early. Perhaps that's why someone else removed this section. If I'm misunderstanding something here, maybe it could be explained more clearly, but my impression is that at least #4 isn't correct and that the cited source was misinterpreted in some way(s). I don't have a copy of the referenced book. Nairbv (talk) 07:37, 2 June 2011 (UTC)[reply]

Exercising American Call Options Early

Why wouldn't it make sense to exercise an American style call option whenever you feel the underlying security is in danger of a immanent and substantial deflation in Market Value? Slawkenbergius (talk) 18:52, 24 September 2010 (UTC)[reply]

Consider what happens when you exercise the call - you are buying the underlying security that you think is about to decrease in value - the opposite of what you want to do! Much better would be to sell the underlier short and therefore generate a return! Ronnotel (talk) 18:04, 1 March 2011 (UTC)[reply]

Adding a citation for dividend trade

ISE Options Exchange has a page devoted to explaning the dividend trade. There is a detailed white paper explaining the dividend trade, as well as volume data to identify past dividend trades.

http://www.ise.com/WebForm/viewPage.aspx?categoryId=533 — Preceding unsigned comment added by 68.32.157.171 (talk) 05:36, 11 February 2012 (UTC)[reply]