Elizabeth owns a call option on 100 shares of Microsoft stock.She has decided to buy those shares.This purchase is commonly referred to as:

Question

Quizplus · Accepted Answer

Exercising the option means that Elizabeth is using her right to buy the 100 shares of Microsoft stock at the strike price determined in her call option contract. This is different from the option expiring, which means that she chooses not to exercise her right and the option contract becomes worthless. The other options mentioned, such as putting the collar or the collar option, are not relevant to this scenario as they refer to a different type of options strategy.

Elizabeth Owns a Call Option on 100 Shares of Microsoft