An American call option buyer on a non-dividend paying stock will

Question

Quizplus · Accepted Answer

An American call option buyer has the right to exercise the option anytime before or on the expiration date. However, it's advantageous for the option holder to wait until the expiration date to see whether the stock price increases enough to make the option profitable. If the owner exercises too early, they may miss out on any further price appreciation. Additionally, the option has a time value attached to it, and by exercising it early, the option owner is giving up some of that value. Therefore, an American call option buyer will generally never exercise the call early.

An American Call Option Buyer on a Non-Dividend Paying Stock