Exercise

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Related to exercise an option: call option, European call option

Exercise

To put into action, practice, or force; to make use of something, such as a right or option.

To exercise dominion over land is to openly indicate absolute possession and control.

To exercise discretion is to choose between doing and not doing something, the decision being based on sound judgment.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
9, 2003, a $6,258,156 modification to a previously awarded cost-plus-fixed-fee contract (N00421-01-C-0062) to exercise an option for services necessary to provide engineering and administrative support for reliability, maintainability, system testability, quality assurance, diagnostic and system safety analyses during the design, development production, and in-service cycles of naval aircraft and their systems.
In summary, you can easily be put into a situation where you exercise an option at a certain share price, hold the stock rather than sell then at a premium, yet are subject to paying a flat 28 percent AMT on the difference between option value and market value on the day that you exercise the option.
In the lingo of the options market, it was "out of the money," or worthless, since investors would not exercise an option to buy shares at $140 when those shares could be acquired for $139.13 on the open market
These so-called cashless exercises have become very popular since they eliminate the need to borrow or to liquidate assets in order to exercise an option.