Which of the following strategies makes no sense?
A) An employee exercises stock options early and sells the stock. No dividends are expected
B) An employee exercises stock options early and keeps the stock. No dividends are expected
C) An employee exercises stock options early and sells the stock. Dividends are expected
D) An employee exercises stock options early and keeps the stock. Dividends are expected.

Question

Quizplus · Accepted Answer

An exchange-traded call option on a non-dividend-paying stock should never be exercised early.The only reason for exercising an employee stock option is monetize it.(The option cannot be sold).But to monetize the option the shares of stock that are obtained must be sold.

Which of the Following Strategies Makes No Sense