European-style exercise

European-style exercise

A method of exercising options contracts in which the buyer can only exercise the contract on the last day before expiration.

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.
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References in periodicals archive ?
Unlike Standard & Poor's Depositary Receipt (SPY) options and other ETF options, Mini-SPX Index options will be cash-settled and feature European-style exercise.
CHICAGO, April 1 /PRNewswire/ -- Ten years ago, on April 2, 1986, the Chicago Board Options Exchange (CBOE) relaunched its S&P 500 index option (SPX(TM)) with a European-style exercise.
The options are European-style exercise, and the settlement value is based on the opening prices of each stock in the index on the business day prior to expiration.
Treasury securities and are European-style exercise (may be exercised on the last day of trading only).
Options on interest rates are cash-settled, eliminating the need to own or deliver Treasury securities upon exercise; and are European-style exercise.
The exercise settlement value of SPQ is based on the closing S&P 500 index value on the last trading day of the quarter and is European-style exercise.
Call and put options on the sector indices will be based on an underlying value of $100 times the index level, are cash-settled and European-style exercise.
Call and put options on the sector indices are based on an underlying value of $100 times the index level, are cash-settled and European-style exercise.
Call and put options will be based on an underlying value of $100 times the index level, cash-settled and European-style exercise.
SPQs, like the corresponding regular S&P 500 index options, have European-style exercise (meaning they can be exercised only on the last business/trading day of the contract).
End-of-quarter index options on the S&P 500, the SPQs, will have contract terms similar to the corresponding regular index options -- European-style exercise (meaning they can be exercised only on the last business/trading day of the contract).
Call and put options will be based on an underlying value of $100 times the index level, will be cash-settled and have a European-style exercise.

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