An action that is taken by an investor or trader whereby he/ she chooses not to exercise or offset a long option position he/ she has already taken. Consequently, the option expires worthless, and the premium paid to establish the position would be vainly lost.
In a different context (Swiss), abandonment refers to the withdrawal from a cancellable forward contract to purchase or take a long position in tradable financial assets (e.g., financial securities).
Comments