Question

A customer purchases an equity option contract at 1:00 PM Eastern Standard Time on Tuesday, October 10th in a regular way trade. If the customer wishes to exercise, the customer may place an exercise notice with the Options Clearing Corporation:_______
a. immediately
b. no earlier than 10:00 AM Eastern Standard time, the next business day
c. no earlier that 10:00 AM eastern standard time, on the 5th business day following trade date
d. no earlier than the Friday immediately preceding the third Saturday of the expiration month

Answer 1

Answer: immediately

Explanation:

An equity option is typically the most common form of equity derivative. It simply gives an investor the right but not an obligation to either buy or sell a call or put at a certain price before a contract expires.

Therefore, if a customer purchases an equity option contract at 1:00 PM Eastern Standard Time on Tuesday, October 10th in a regular way trade and the customer wishes to exercise, the customer may place an exercise notice with the Options Clearing Corporation immediately.