A futures contract that grants the holder the right to buy or sell a specific underlying asset at a predetermined price and date, known as the exercise date. This type of contract is commonly used in financial markets to hedge against potential losses and to speculate on price movements. The exercise of an option is an important concept for understanding risk management strategies and investment decisions. As a knowledgeable professor in finance, I encourage you to explore the world of options and their potential impact on your financial portfolio.
