Does options exercise increase a stock's trading volume?
When I buy or sell a stock, the transaction will increase the stock's trading volume. Instead, suppose I buy an option and decide to exercise it immediately (for whatever reason). When I exercise a call option, I am buying stock from the counterparty. When I exercise a put option, I am selling stock to the counterparty. Does options exercise increase a stock's trading volume?
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No. Yes. It does not have to - it all depends whether the stocks you get are bought by the seller or whether he transfers you stock from his portfolio (i.e. I am long, sell you a call, then give you my shares). In the last case there is no transaction happening that hits the trading volume.
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