Glossary term
Exercise
When an option holder invokes the right to buy (call) or sell (put) the underlying at the strike price.
Exercise is the act of an option holder invoking the contractual right to buy (call) or sell (put) the underlying at the strike price. American-style options can be exercised any time before expiration; European-style only at expiration. Exercise is the buyer-side mirror of assignment, which is what the seller experiences when the buyer exercises. See Assignment & Rolling 101.