A:

A. It is made through the OCC.

B. It must be executed by 4:30 p.m. CT the day before the expiration date.

C. It is not executed if the option expires.

D. It is determined on a random or FIFO basis.


Correct answer: D

This is true of assignment, not exercise notice.

RELATED FAQS
  1. When holding an option through expiration date, are you automatically paid any profits, ...

    Holding an option through the expiration date without selling does not automatically guarantee you profits, but it might ... Read Answer >>
  2. A Straddle

    A. Speculates on the rate of change of a security's market price. B. Speculates on the rate of change of an option's market ... Read Answer >>
  3. How do I change my strike price once the trade has been placed already?

    Learn how the strike prices for call and put options work, and understand how different types of options can be exercised ... Read Answer >>
  4. After exercising a put option, can I still hold my option contract in order to sell ...

    Once a put option contract has been exercised, that contract does not exist anymore. A put option grants you the right to ... Read Answer >>
Related Articles
  1. Financial Advisor

    The Best Strategies to Manage Your Stock Options

    We look at strategies to help manage taxes and the exercise of incentive and non-qualified stock options.
  2. Trading

    4 Reasons To Hold Onto An Option

    There are times when an investor shouldn't exercise an option. Find out when to hold and when to fold.
  3. Trading

    American Vs. European Options

    These two options have many similar characteristics, but it's the differences that are important.
  4. Trading

    Give Yourself More Options With Weekly and Quarterly Options

    Weekly and quarterly options were introduced to give a greater choice of option expirations to investors, and enable them to trade more efficiently.
  5. Trading

    Options Strategies for Your Portfolio to Make Money Regularly

    Discover the option-writing strategies that can deliver consistent income, including the use of put options instead of limit orders, and maximizing premiums.
  6. Managing Wealth

    Get The Most Out Of Employee Stock Options

    These plans can be lucrative for employees - if they know how to avoid unnecessary taxes.
  7. Trading

    Three Ways to Profit Using Put Options

    A brief overview of how to profit from using put options in your portfolio.
  8. Trading

    Trading OEX Options: The Risk Of Early Exercise

    Exercising early can benefit options traders, but only when trading American-style options.
  9. Investing

    American Vs. European Options—Key Differences

    There are four key differences between American- and European-style options.
RELATED TERMS
  1. Early Exercise

    The exercise of an option prior to its expiration date. Early ...
  2. Call On A Call

    A type of compound option in which the investor has the right ...
  3. Expiration Time

    A specified time, after which the options contract is no longer ...
  4. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
  5. Call Over

    When the buyer of a call option exercises the option. In options ...
  6. Exercise

    To put into effect the right specified in a contract. In options ...
Hot Definitions
  1. Collateral

    Property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan ...
  2. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
  3. Racketeering

    A fraudulent service built to serve a problem that wouldn't otherwise exist without the influence of the enterprise offering ...
  4. Aggregate Demand

    The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.
  5. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  6. Blue Chip

    A blue chip is a nationally recognized, well-established, and financially sound company.
Trading Center