Why Is Early Exercise of an American Call Option on Crypto Often Suboptimal? ⎊ Path

Why Is Early Exercise of an American Call Option on Crypto Often Suboptimal?

Early exercise of an American call option on a non-dividend-paying asset like crypto is suboptimal because it forfeits the remaining time value of the option. The holder is better off selling the option in the market for its premium (intrinsic + time value) rather than exercising for only the intrinsic value.

Why Is Exercising an American Call Option Early to Capture a Large In-the-Money Value Still Usually a Poor Decision?

What Is the Opportunity Cost of Exercising a Deep In-the-Money American Call Option Early?

Why Is It Generally Not Optimal to Exercise an American Call Option Early?

Why Are American Call Options on Non-Dividend-Paying Stocks Rarely Exercised Early?

Why Is an American Call Option on a Non-Dividend-Paying Stock Rarely Exercised Early?

Why Is Early Exercise Generally Not Optimal for an American Call Option on a Non-Dividend-Paying Asset?

Does the Underlying Asset’s Volatility Influence the Decision to Exercise an American Option Early?

Why Are American Options Rarely Exercised Early in the Equity Market?

Glossar

Early Exercise

Trigger ⎊ Early exercise, within cryptocurrency options and financial derivatives, denotes the right ⎊ but not the obligation ⎊ of the option holder to realize the intrinsic value of the contract prior to its scheduled expiration date.

American Call Option

Exercise ⎊ An American call option within cryptocurrency derivatives grants the holder the right, but not the obligation, to purchase an underlying crypto asset at a predetermined strike price on or before the option’s expiration date.