Should i exercise my stock options as soon as they vest
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Should i exercise my stock options reddit
Tax implications of exercising stock options...
Should an Investor Hold or Exercise an Option?
Several factors must be considered when you're deciding if it's an optimal time to call or buy the shares or put or sell the stock when you're holding a long call option or a long put option.
They include how much time value remains in the option, whether the contract is due to expire soon, and whether you really want to buy or sell the underlying shares.
Key Takeaways
- Knowing the optimal time to exercise an option contract depends on several factors including how much time is left until expiration and if the investor really wants to buy or sell the underlying shares.
- Options can be closed rather than exercised before expiration in most cases through offsetting transactions.
- It doesn't make a lot of sense to exercise options that have time value because that time value will be lost in the process.
- Holding the stock rather than the option can increase risks and margin levels in the brokerage account.
Right to Exercise Options
Newcomers usually start by learning the various types of contracts and strategies when
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