European-style option

European-style option

An option contract that can be exercised only on the expiration date.

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.
References in periodicals archive ?
The range of new contracts includes DME Oman Swap, DME Brent-Oman Swap, DME Oman Average Price Option, and DME Oman European-style Option, subject to the final clearance from CFTC and DFSA.
The contracts -- Oman swap, Brent-Oman swap, Oman average price option, Oman European-style option -- have been drafted and put out to consultation and are awaiting regulatory approval for launch, the exchange said.
The EUA options contract (commodity code AV) will be a European-style option that will exercise into the underlying EUA futures contract.
The range of new contracts include DME Oman Swap, DME Brent-Oman Swap, DME Oman Average Price Option, and DME Oman European-style Option, subject to the final clearance from CFTC.
A European-style option is when the payment is determined based on a predefined point of time.
Central Time) on any Thursday of the contract month that is not the termination of a quarterly or serial European-style option.
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.
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.
The enclosed interactive CD supplements these concepts and includes a calculator for European-style options, a bonus quiz, additional articles and links to helpful information.
They differ from European-style options contracts, which may be exercised only on the expiration date.

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