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Hi,I wonder if anyone could clarify why the american call (no divs) is equal to the european call, ie why isn't there any optimal early exercise time ?I can see taht from a mathematical point of vue, but not really from intuition and market feeling.I read an interesting appraoch in Taleb's book "dynamic hedging" saying that early exercise is related to arbitraging between the carry rate and interest rate, but i must say i got lost...Any help appreciated!

If you exercise early and hold the stock to options expiry, you'll incur financing costs. Plus, if the stock tanks during that time, you'll wish that you hadn't exercised.

By exercising early an American call on a non dividend stock you lose the interest on K(strike) you would gain if you invested it instead and you also lose the value of not exercising.

The most general answer would be : Option, whichever it is and how extoic it might be, can always decompose its value into intrinsic and time value.And the most important rule is that the optimal execise time is once its time value is ehausted ( so option value equals its intrinsic) .American option w/ non-cash-out-flow underlier has a positive time value throughout its life , so accordingly never excecied optimally.On the other side ,when there is cash out flow. It is actually the leverage cost as part of the time value that might reduces the time value to zero. And that always happens right before dividend payment.