When Do Holders of Equity Options Exercise Early?
October 13, 2015 - Equity Options
When does it make sense to exercise equity options early? Does it happen frequently? In the September 2015 version of their paper entitled “Early Option Exercise: Never Say Never”, Mads Jensen and Lasse Pedersen investigate the interaction of investment frictions (shorting, trading and funding costs) and early exercise of equity options. They estimate shorting frictions via… Keep Reading