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Re: postes post# 294112

Tuesday, 09/01/2020 7:42:09 AM

Tuesday, September 01, 2020 7:42:09 AM

Post# of 424566
It usually doesn’t happen because it is typically better for the option owner to sell the option and receive both the inherent value of the option and the time vale. If you exercise the option before expiration you are giving up the time value. The further from expiration the higher the time value. Volatility is also a big component in determining the value of the option. Google Black Scholes Pricing Model to better understand how options are valued.

I have seen options on low volatility stocks (small time value) exercised before expiration to receive a dividend that was big.
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