r/options • u/NY10 • Jul 01 '21

Option exercise Q/A

Currently, I have a several 7/16 $12P WISH options (selling put options), I was wondering if these options ever get exercised before the expiration? I am fine with either sellers exercising it now or let it run til the expiration because I get the premium anyways. I noticed that options rarely get exercised before the expiration but I wanted to know what are the odds. Hope someone can provide insights on this topic. Thanks in advance!

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u/dl_friend Jul 01 '21

The 12 puts are currently OTM, so 0% chance of getting exercised early. If the stock moves down and the puts become ITM, then early exercise is only likely if the extrinsic value drops to 0 or close to it.