GENERAL KNOWLEDGE

Detailed explanation-1: -A long call option gives the holder the right to demand delivery of the underlying security or stock on any day within the contract period. This feature includes any day leading up to and the day of expiration.

Detailed explanation-2: -The holder of an American-style option contract can exercise the option at any time before expiration. Therefore, an option writer may be assigned an exercise notice on an open short option position at any time before expiration.

Detailed explanation-3: -Call options are “in the money” when the stock price is above the strike price at expiration. The call owner can exercise the option, putting up cash to buy the stock at the strike price. Or the owner can simply sell the option at its fair market value to another buyer before it expires.

Detailed explanation-4: -An American option is a derivative contract that can be redeemed or exercised at any moment throughout the Option’s life or at the Option’s maturity date. This means that the option holder or investors can exercise the Option at any moment before or after the expiration date.

Detailed explanation-5: -An American Call option allows the holder of the option to ask for the delivery of the security or stock anytime between the execution date and the expiration date when the price of the assets shoots above the strike price. The strike price does not change throughout the contract in an American Call option.