American option(redirected from American)
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Related to American: American eagle, delta, American Express
An option contract that may be exercised at any time on or before the expiration date. For example, if one buys an American call giving him/her the right to buy shares in X expiring on the final Friday in March, the call may be exercised at any time on or before the final Friday in March. The differentiating feature of an American option is the fact that its value varies according to the value of the underlying asset over the life of the contract. This means that a holder may wait for an advantageous price and exercise the option. This contrasts with a European-style option, which may only be exercised on the expiration date.
A put or call option that permits the owner to exercise the option at any time on or before the expiration date.