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Investing Glossary:
Exercise
Copyright 2010,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Definition: |
| The Right granted under the terms of a listed options contract. Call holders Exercise their right to Buy the Underlying security. Put holders exercise their right to Sell the underlying security. There is generally an Exercise limit placed by the options exchange. This is to prevent a group of investors or an individual Investor from Cornering the market on an underlying security. o implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security.
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