# Exercising Options - How does it work?



## aaronphetamine (11 August 2009)

I've got a rather silly question about Options that I'm looking to get an answer on for my own satisfaction. 

I know how Options work - what I'm looking to find out is how they are actually exercised with your broker...

Let's assume youve got an american style call option and its in the money right now and I want to exercise it.... How would one actually go about doing that?

Let's assume you've got a european style call option and its on the expiry date and it's in the money and I wish to exercise it... How would one actually go about doing that?

Thanks.
Aaron.


----------



## Tradesurfer (11 August 2009)

typically for US based or traded options contracts, you would have to give your broker instructions to excercise either by calling or if they allow you to do so electronically (you may want to confirm their process and any cutoff times)

If your looking to take profits only and not hold positions- there may be more benefit to simply selling the call or put to close since generally the contracts may still have some time value or implied volatility juice left in them. If your wanting to hold shares then excercise would be your option so to speak.

but definetly confirm the process and all with your broker


----------



## NeuromanceR (11 August 2009)

And don't forget that some brokers will automatically exercise any ITM options on expiration(sometime after the market has closed) unless you tell them otherwise.


----------



## jubuss (24 February 2015)

Hey guys on a similar topic, when are options "Usually" exercised based on price?? 

Are they generally exercised once the strike has been passed by $0.01cent or do you think it would be more likely that it could be strike plus option premium paid?? I know it's very hard to guess as investors are purchasing options at various times and therefor for various premiums, but as a general rule could you say that options are exercised after strike PLUS premium have been surpassed??

Or would most people just exercise the options after strike has been passed and hope the stock increases above premium paid??

Thanks


----------

