An option is a right to purchase at a given price. An option at 63$ means that you have the right to buy a share at 63$ at any time. After that, you sell the share at current price.
In your case, you would buy at 63$ (exercising your right to purchase at the "then" price) and sell either now at 45.26$ or later...
So, unless you desperately need capital loss for tax purposes, this is DEFINITELY a wait-to-exercise situation! When you have options at a higher price than the stock's current value, DO NOT exercise. Either let them expire (it costs you nothing) or exercise when you can make a profit on them.
PS: to precisly answer your question: yes, you are correct in your assumption on how it works.
Last edited by EFalardeau; 10/16/07 02:35 PM.
