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Exercising an option means exercising your rights to buy or sell the underlying asset in accordance to the parameters of the option.

When you exercise a call option, you will get to buy the underlying stock at the strike price no matter what price the stock is trading at in the market.

When you exercise a put option, you will get to sell the underlying stock at the strike price no matter what price the stock is selling at in the market.

In both cases, the option you own disappears from your account.

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12y ago

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