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HMRC internal manual

Stamp Taxes on Shares Manual

Derivatives: introduction to options: Exercise

If a holder of an option decides to take-up his right under the terms of an option contract to buy or sell an underlying asset according to the agreed ‘strike’ (see STSM112010) price, then he is said to have exercised the option and the option issuer or writer is obligated to deliver the underlying asset or arrange to tender the equivalent cash amount (see STSM112060).