European Option

An option that can only be exercised at the end of its life, at its maturity. European options tend to sometimes trade at a discount to its comparable American option. This is because American options allow investors more opportunities to exercise the contract.

European options normally trade over the counter, while American options usually trade on standardized exchanges. A buyer of an European option that does not want to wait for maturity to exercise it can sell the option to close the position.


Investment dictionary. . 2012.

Look at other dictionaries:

  • European option — Option that may be exercised only at the expiration date. Related: american option. The New York Times Financial Glossary An option that the holder can exercise only on the expiration date. See American option, Bermuda option and Asian option.… …   Financial and business terms

  • European option — An option that can only be exercised on its expiry date. Compare: American option …   Accounting dictionary

  • European option — /jurəˌpiən ˈɒpʃən/ (say yoohruh.peeuhn opshuhn) noun Stock Exchange an option that can be exercised only at its maturity date. Compare American option …   Australian English dictionary

  • European option — Fin an option that the buyer can exercise only on the day that it expires. See also American option …   The ultimate business dictionary

  • European option — noun An option that can be exercised only at expiry date …   Wiktionary

  • European option — See option …   Big dictionary of business and management

  • European option — right to buy or sell an asset at a set price only on the expiration date (Economics) …   English contemporary dictionary

  • Option style — In finance, the style or family of an option is a general term denoting the class into which the option falls, usually defined by the dates on which the option may be exercised. The vast majority of options are either European or American (style) …   Wikipedia

  • Option (finance) — Stock option redirects here. For the employee incentive, see Employee stock option. Financial markets Public market Exchange Securities Bond market Fixed income …   Wikipedia

  • option — an agreement, often for a consideration, which permits the purchase or sale of something within a stipulated time, in accordance with the terms of the agreement. For example, a right by a tenant to take up a further lease of premises, usually… …   Financial and business terms

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