What is it called when a buyer exercises their rights under an option contract?

When a buyer exercises their rights under an option contract, it is referred to as "exercise." This term specifically denotes the action taken by the holder of the option to buy (call option) or sell (put option) the underlying asset at the agreed-upon price before the expiration date of the option. "Exercise" reflects the fulfillment of the rights granted by the option contract, allowing the buyer to take action based on the terms of the agreement.

Assignment, although a term used in the context of options, refers to the process whereby the seller (or writer) of an option obligation designates another party to fulfill this obligation when the option is exercised. Therefore, it doesn’t pertain to the buyer's action.

Appraisal relates to the assessment of the value of an asset, which is not applicable in the context of option contracts.

Leverage refers to the use of borrowed capital to increase the potential return of an investment, and is not directly related to the exercising of an option.

Understanding the terminology surrounding options is crucial for anyone involved in trading or managing investments, as it helps clarify the processes and rights associated with these financial instruments.