I have seen the rationale behind why it is never optimal to exercise an American call option early, but have a question about it.
If the option strike price is E=$20 and it expires at T=1yr, if the share price is S=$25 at expiry, the profit will be $5 per share. However, what if at T=0.5yr the share price was S=$40 following a jump in the price. Exercising at this point would yield a profit of $20 per share.
Would it not be more optimal to exercise early, in this case?
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