American option

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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 ?
The American-style options will be offered in two months in the March Quarterly Cycle, and the European-style options will be offered in two serial months.
Gasoil Outright - ICE Low Sulphur Gasoil American-Style Options (ULS)
Mathematical aspects and types of American-style options appear in the appendices.
Linear complementarity problems arise from so-called American-style options.
ICE also announced the introduction onICE Futures Europeof American-style options on futures for Heating Oil and RBOB Gasoline.
These are American-style options, which the holder may exercise at any time.
The American-style options can be exercised by the holder from and including the first business day following the day a position has been initiated up to and excluding the expiration date, during a trading session.
Cassidy also said that most recently the Company added American-style options on OPEX.
American-style options on natural gas (ON), RBOB gasoline (OB), heating oil (OH), will be available to trade on OPEX on May 7, 2007.
We continue to add new functionality, broaden market access and increase the types of options products on CME Globex, such as American-style options for FX and electronic livestock, which were previously only floor traded," said Rick Redding, Managing Director, CME Products and Services.
CME will also select firms to commit to provide continuous, transparent and competitive electronic markets for the American-style options.
CME will continue to offer American-style options on both Euro FX and Japanese yen futures contracts.

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