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Define: European Style Options



European Style Options are options that can only be exercised upon expiration.

Unlike its counterpart, the American style option which can be exercised at any time, the European style option commands a lower premium due to the lack of flexibility and are typically created for cash settled options which does not have an underlying stock for delivery in the first place. As such, most index options are European style options. It has nothing to do with where the option is traded. European style options are not traded only in Europe.

Read the full tutorial on European Style Options.