American options
American options are financial contracts that give the holder the right to buy or sell an underlying asset, like stocks, at a predetermined price before or on a specified expiration date. Unlike European options, which can only be exercised at expiration, American options allow for flexible timing, meaning the holder can exercise their option at any point during its life. This flexibility can increase their value, as it allows the holder to take advantage of favorable market conditions more readily. American options are commonly used in trading and investing strategies.
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American options are a type of financial contract that gives the holder the right to buy or sell an underlying asset, like a stock, at a predetermined price before or on a specific expiration date. Unlike European options, which can only be exercised on the expiration date, American options can be exercised at any time during their life. This flexibility can be advantageous for investors, allowing them to take advantage of favorable market conditions. Essentially, American options provide a way to manage risk and speculate on price movements with more timing options.