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Old 05-06-2010, 05:00 PM   #23
DoctorTDent

Join Date
Oct 2005
Posts
506
Senior Member
Default
If you would have said earlier that it was sub-optimal to exercise early since there would always be more value in selling the option (just another form of cashing in really!!)
/

This post is utterly ridiculous. I suggest you read a basic financial math book. Real investors, if they wish to take a market view, will resell the option for >= the intrinsic value in the market (strictly greater if implied volatility is anything other than 0). If the price was ever less than the intrinsic value then there exists a simple arbitrage. Exercising early is always suboptimal, modulo transaction costs and some minor difficulties like shorting at a retail level.
Like I said, please pay attention
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