European option

European option

Option that may be exercised only at the expiration date. Related: American option.

European Option

An option contract that may only be exercised on the expiration date. For example, if one buy a European call giving him/her the right to buy shares in X expiring on the final Friday in March, the call may only be exercised on the final Friday in March. The implication of a European option is the fact that its value is entirely dependent on the value of the underlying asset at the end of the contract. A holder may not wait for an advantageous price and exercise the option. This contrasts with an American option, which may be exercised at any time prior to expiry.

European option

An option that can be exercised only on its expiration date, in contrast to the option available in the United States whereby the owner may exercise any time up to and including the expiration date.
References in periodicals archive ?
The European option will give the whole squad more game-time.
The European option would depend on Albion's willingness to sell him in January.
Amusan [11] introduced and compared various methods to estimate the parameters of the CAM model from data, compared the empirical and theoretical density functions for stock price data, and compared European option prices when the stock price was modeled using the CAM model and the Ornstein-Uhlenbeck process.
Salam is more like the European option, because it can be exercised only on the due date using the predetermined exercise price.
Cox and Ross (1976) have shown that the price of a European option on the share S can be written as the discounted expected value of its payoffs at expiration.
This is because it is not true that the owner of a long-life European option has all exercise opportunities open to the owner of a short-life European option.
Luxembourg, a European option for foreign production due to its generous tax shelter, is upping the ante with the launch of Filmland.
Let us all pray for some genuine inspiration rather than an easy European option in selecting a genuine successor to St Peter rather than preserving an all-too-convenient secret society bent on perpetuating its own power base.
To this end, the new set of points will cluster the grid nodes not only at the boundaries but also at the singularity located at the strike price for a European option.
Work is currently in progress to evaluate these submissions and selection of a preferred south -eastern and central European option is expected by the end of June 2012.
His topics include stochastic processes, numerical methods, European option pricing, and pricing outside the standard Black and Scholes model.
The holder of an American option has the right to exercise the contract at any stage of during the period of the option, whereas the holder of a European option can exercise his right only to the end of the period.

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