Early exercise

The exercise or assignment of an option prior to expiry.

Similar financial terms

Early withdrawal penalty
A penalty on money withdrawn prematurely from a fixed-term investment, such as a tax-deferred pension plan before the age of 59 1/2 in the US.

Exercise price
Price at which the holder of an option can buy (call option) or sell (put option) the underlying stock. Also referred to as strike price.

Exercise limit
The maximum number of option contracts that can be exercised within a five-day period.

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Tick-test rules

SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors from destabilizing the price of a stock when the market price is falling. A short sale can be made only when either (a) the sale price of the particular stock is higher than the last trade price (referred to as an uptick trade) or (b) if there is no change in the last trade price of the particular stock, t ...


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