Swanand

nielsendc Wrote:
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> example: i own a call option with a strike at $10
> and the underlying is $12. The value of my option
> is at LEAST $2 where if i exercise the value is
> EXACTLY $2 (aside from costs). Further, Ive tied
> up my capital by exercising.

Sure you will lose if you exercise with plenty of time left for expiration.

Get this though. Let us say the $12.50 strike call is selling for $1. Can you think of a case (real not theoretical) in which the next day, the stock is still trading at $12 but your call is worthless, with still plenty of time before expiration?