American option


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Related to American option: Bermudan option

American option

An option that may be exercised at any time up to and including the expiration date. Related: European option

American Option

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.

American option

A put or call option that permits the owner to exercise the option at any time on or before the expiration date.
References in periodicals archive ?
For [alpha] = 1, the time-fractional derivative reduces to the first-order derivative in time and the problem becomes the classical American option pricing problem.
Recent developments in the valuation of complex American options has allowed progress in the solution of many interesting real option problems.
To the best of our knowledge, IMEX-PC methods have not been used to price financing options, except in [37] where a second-order IMEX-PC scheme is used to price American options.
We used the LSM algorithm to calculate the american option and simple Monte-Carlo simulation for the case of the european option.
At each date, IV is chosen to minimize the unweighted sum of squared deviations of Baronep-Adesi and Whaley's (1987) formula for pricing American options on futures with the actual settlement prices for the two nearest-to-the-money call options and two nearest-to-the-money put options for the appropriate futures contract.
Although not discussed here, deltas for American options can be similarly derived for the example shown here.
By contrast, since CRP in its current form involves finite-term contracts, participation is neither an irreversible investment decision nor analogous to a perpetual American option.
Now there will be a Latin American option in Puerto Rico.
Where exit from an investment is often seen as a viable American option, perpetuity of ownership was more likely to be the German or Japanese goal.
If an option can be exercised at any time up to and including its expiration date, it is called an American option.
This option to transfer would behave very much like an American option to lock in a GMDB at a time of the policyholder's own choosing.
The holder of an American option can exercise it any time up to and including the expiration date.

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