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European equity put option definition

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European equity put option definition


European equity put option definition


This article needs additional citations for european equity put option definition. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).

For the employee incentive, see Employee stock option. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium. Reproduction of all or part of this glossary, in any format, without the written consent of WebFinance, Inc. is prohibited.Disclaimer and Copyright.

European options tend to sometimes trade at a discount to their comparable American option because American options allow investors more opportunities to exercise the contract. Just as there are two different types of options ( puts and calls), so there are two main styles of options: American and European.

Many rookies have suffered unnecessary losses because they were unaware of the differences. In other words, the difference between a European and American options is that the European style calls and puts can be exercised ONLY on the expiration date while the American style calls and puts can be exercised at any time PRIOR to their expiration date.Most index options traded in the U.S.

are European style. It means that the you are concerned ONLY with the price of the stock or index at its expiration. An equity index option is a security which is intangible and whose underlying instrument is composed of equities: an equity index.




Option european put definition equity

Option european put definition equity

Option european put definition equity



Category: Fx trading

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