European option

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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 ?
At present time Company concentrates on Monte Carlo based methods like Black-Sholes model for European-style options.
Options to be listed will include an average price option and underlying calendar swap, as well as American-style and European-style options.
The Black-Scholes model was developed for European-style options exercisable only at expiration.

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