Definitions (2)

1. To implement the rights of an option, by buying (in the case of call options) or selling (in the case of put options) the underlying asset.
2. To exchange a right or warrant for the appropriate amount of stock.

Use exercise in a sentence

The trader opted to exercise his call option as he had been bullish on the stock for months and finally realized his gains when the markets matched his predictions.

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You need to exercise patience when you are dealing with an investment and let it play its full course out.

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At the end of the year, the employees had the right to exercise their stock options and many took advantage of this since the stock price was so cheap.

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capped-style option naked call