Exercise

Using the right an option gives you. Exercising a call buys 100 shares per contract at the strike price. Exercising a put sells them at that price. If the stock ends past the strike (above it for a call, below it for a put), the option is usually exercised for you on its last day. Before then, selling the option often brings in more than exercising it. Here, you can exercise an option you bought before it expires, and paper options that end past the strike are exercised for you. A call is only exercised if you have the cash to buy the shares. If not, it expires worthless.