Does an American Put Option on a Non-Dividend Paying Stock Ever Benefit from Early Exercise?
Yes, an American Put option on a non-dividend-paying stock can benefit from early exercise, unlike a Call option. Early exercise of a Put may be optimal when the stock price is very close to zero, as the option's intrinsic value is near its maximum.
The option holder can exercise to receive the strike price cash immediately and invest it to earn interest, outweighing the loss of time value.
