Options that can be exercised on or before the due date are commonly known as American options).
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If you apply the example of the property deal to the stock market you get the same situation.
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Lets explore the argument that no matter what you do you can’t beat the market.
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The insurance company on the other hand has the obligation to pay you should you should you exercise that right in exchange for accepting your premium each month.
He will of course forfeit the $1000 that he paid for the option.