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Exercise notice |
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Exercise noticeA formal notice to the writer of an option from a clearing house that an option has been exercised by an option holder and that the writer is obliged to buy/sell the underlying instrument at the exercise price to meet his/her obligations.Similar MatchesEuropean style exerciseEuropean style exerciseA method of exercising options contracts in which the buyer can exercise the contract on the last day before expiration. Automatic exerciseAutomatic exerciseA protection procedure whereby the Options Clearing Corporation attempts to protect the holder of an expiring in-the-money option by automatically exercising the option on behalf of the holder. European ExerciseEuropean ExerciseA feature of an option that stipulates that the option may only be exercised at its expiration. Therefore, there can be no early assignment with this type of option. ExerciseExerciseWhen an option or warrant holder takes up his or her option to buy or sell the underlying instrument (for example shares, commodities, an index etc) he/she is said to exercise the option or warrant. Adjusted exercise priceAdjusted exercise priceTerm used in options on Ginnie Mae (Government National Mortgage Association) contracts. The final exercise price of the option accounts for the coupon rates carried on Ginnie Mae mortgages. For example, if the standard GNMA mortgage has an 9% yield, the price of GNMA pools with 13% mortgages in them is altered so that the investor receives the same yield. Further SuggestionsExercise settlement amountexercise price Aggregate exercise price early exercise Nominal exercise price Return if Exercised Exercise value |
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