Exercise limit

Definition:

Cap on the number of option contracts of any one class of contract that can be exercised within a five-day period contract. There are no restrictions on exercise for the last 10 trading days before expiry. A stock option's exercise limit varies with the volume of the underlying stock.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Shakeout

A dramatic change in market conditions that forces speculators to sell their positions, often at a loss.

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