Blog Home / Financial Terms / European Options

European Options

A European options contract limits execution to the expiration date, providing more certainty for the buyer.

What are European Options?

European options are the options that cannot be retired before maturity. The only difference between an American option and a European option is that the American Option can be exercised early; American options can always be used to replicate their corresponding European options simply by choosing not to exercise them until expiration. 

Why are they important?

The risk managers choose between the American Options and the European Options as the available options for Hedging. Hence, it is critical to know the concepts of the European Option.

Owais Siddiqui
1 min read
Related:
Financial TermsCPD
Dow Theory: Understanding the Primary Trend and the Secondary Trend
Sagar Pujari 04 July 2022
Financial TermsFRM
What is Standard Deviation?
Owais Siddiqui 19 September 2022
Financial TermsFRM
Hedging,Types and Importance
Owais Siddiqui 19 September 2022
Financial TermsFRM
What is Hedging?
Owais Siddiqui 19 September 2022
Financial TermsFRM
Variance
Owais Siddiqui 19 September 2022

Shares

Leave a comment

Your email address will not be published. Required fields are marked *