Is it better to exercise options or sell?
Occasionally a stock pays a big dividend and exercising a call option to capture the dividend may be worthwhile. Or, if you own an option that is deep in the money, you may not be able to sell it at fair value. If bids are too low, however, it may be preferable to exercise the option to buy or sell the stock.
Should I exercise all my stock options?
Whether your options have value
It only makes sense to exercise your options if they have value. If they do, they’re known as “in-the-money.” This happens when the strike price (or exercise price) of your stock options is lower than the market price of your company shares trading on the exchange.
Why would you exercise an option?
Exercising a put option allows you to sell the underlying security at a stated price within a specific timeframe. Exercising a call option allows you to buy the underlying security at a stated price within a specific timeframe.