The process of buying or selling shares of stock under the terms of an option contract before expiration is known as Early Exercise. Many factors must be considered when making the decision to exercise an options contract early. Early exercise may be beneficial if the stock price is expected to rise significantly before the expiration date, since holders can profit from the difference between the strike price and market value.However, if the stock price is expected to fall, then it may not be advantageous to exercise early. Additionally, holders must pay attention to their own personal financial situation when deciding whether or not to execute an options contract prior to expiration. Overall, exercising an option contract early can provide investors with opportunities for increased profits; however, it is important that they weigh all potential risks and benefits before making a decision.
