Options

Exercise (Options)

When an Option buyer formally uses their right to transact at the strike price — in India, index options typically settle in cash rather than physical delivery.

Exercising an Option means the buyer formally uses their right — for a Call option, buying the underlying at the strike price; for a Put option, selling the underlying at the strike price. In India, most cash-settled index options result in a cash settlement of the profitable difference, rather than physical delivery of the underlying.

See how exercising fits into a full worked example in What Are Options? The Complete Beginner’s Guide.