European option

(redirected from European Options)

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 homes' dining choices provide the rich cultural diversity of their communities with a wide range of dishes with Caribbean, Asian and European options every day.
Such consultations should be followed by a reconsideration in Parliament of our European options. Then, if it is agreed that the situation has changed, Parliament will have the option of a renegotiation with the EU, followed by a referendum to give the entire electorate the final say.
Benitez is understood to have requested Premier League experience in recent transfer meetings to give Newcastle an instant boost but European options could be key once again.
The same goes for long option hedges and zero-cost collars--although in those cases, the options must be European options (i.e., exercisable only on their expiration dates).
"However, European options are also being considered and a final decision will be made on a site that makes both financial and business sense."
The main problem with the above-mentioned formulae (4, 5, 6, 8) is therefore pricing and hedging European options in this incomplete market context.
This paper has three main goals: (1) define and study the properties of the family of Gram-Charlier distributions; (2) define a Gram-Charlier process and derive its basic properties; (3) apply those to European options. The formulas we give for European option prices and Greeks apply to Gram-Charlier distributions of any order, and we use four- and six-parameter Gram-Charlier distributions in our examples.
We apply the simulation scheme to European options and take the fast Fourier transform solutions as benchmark.
Also in 1978, the Amsterdam Stock Exchange opened the European Options Exchange (EOE).
Most of the studies on market efficiency are based on developed markets like, US options and futures market and European options markets, which are efficiently traded (Merton 1973; Black and Scholes 1972; Klemkosky and Resnick 1980; Evnine and Rudd 1985; Kamara and Miller 1995; Ackert and Tian 2000, 2001; Puttonen 1993; Chesney et al, 1995, Berg et al, 1996; Cavallo and Mammola 2000, and Brunetti and Torricelli 2003; Mittnik and Rieken, 2000a,b; Capelle-Blancard and Chaudhury 2001).

Full browser ?