When does it make sense to exercise an option early?
The answer is that it generally does not make sense - unless the option is:
a) Deep in the money and/or
b) Very close to expiration.
It is a worthwhile effort to "do the math" on exercising an option early.
Let's say that I bought RIMM stock at $75.00 (back in April when a short put was assigned.) As a smart Options Animal trader, I bought a protective put. (...and I have been trading those puts over the past few months.)
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