Anavex Life Sciences Corp (AVXL)

[Jockimo]

A call gives the holder the right to buy at the strike price. No one would ever exercise a call option that is out of the money - why would they exercise an $8 call if the stock is $7.50 - better to simply buy at $7.50 in the market than pay $8.

Something to keep in mind, the holder of the call, the purchaser, can exercise at any time up to expiration. So if the stock were at 7.50, the holder of a 5 call could exercise it at any time up to expiration. The seller of the call would get his stock called away and receive $5 a share in addition to the premium he already collected when he sold the call.