Gersh, It's on the other side of the ledger.
Worse than French, it's accounting lingo.
If a call is exercised, its cost is added to the seller's amount realized and to the buyer's basis of the purchased stock. If a put is exercised, its cost reduces the amount realized upon the sale of the underlying stock. From CCH U.S. Master Tax Guide.
The only advantage I see is that when an investor has a big gain in a call option, the investor (assuming still bullish on the underlying) can exercise the option, and, thus, defer the gain to possibly realize the lower capital gain rates. However, while a viable strategy, I've never seen it implemented.
Berney
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