# Exercise

*Derivatives & Options — Finicade finance glossary*

Exercise is invoking your right as an option holder to buy or sell at the strike price. For most listed options it's rarely optimal before expiry — selling the option captures its remaining time value, which exercising throws away. In-the-money options are usually exercised automatically at expiry, which catches out holders who lack the cash to take delivery, so closing the position beforehand is the safer default.

**Also known as:** exercising an option, exercise notice

**Related terms:** [Assignment](https://finicade.com/glossary/assignment), [Strike Price](https://finicade.com/glossary/strike-price), [Intrinsic Value](https://finicade.com/glossary/intrinsic-value), [Early Exercise](https://finicade.com/glossary/early-exercise), [American Option](https://finicade.com/glossary/american-options)

Source: https://finicade.com/glossary/exercise