ann, page-21

onlytheone, if you could exercise them instantaneously then arbitrageurs (risk free profit seekers) would ensure that the price of the options was no more than 20 cents (the exercise price) less than the stock price.

but obviously you cant exercise them instantaneously, it takes a few weeks to send the forms and for them to add the shares to your chess holdings etc, so the risk with the strategy you mentioned is that by the time all this gets done the share price may have dropped and you make a loss.

however, if you're looking for entry into the stock and you want to hold the stock rather than trade, why pay 10 cents more to buy them on market when you can just buy the oppies and exercise them??

they teach you all this stuff in finance courses but when you reach the real world you find things work a little differently.