American Option
An American Option grants its holder the flexibility to exercise the contract at any point before or on its expiration date, offering greater control compared to other option types. However, in India, American-style options are not available for trading. The Indian financial markets primarily offer European-style options, which can only be exercised on the expiry date. This distinction limits the timing flexibility for investors in India, as they cannot act on market movements prior to expiration. Understanding these regional differences is crucial for investors navigating global derivatives markets, as contract terms significantly impact trading strategies and potential outcomes.
Related Terms
Cash and Cash Equivalents
Cash and cash equivalents are short-term assets classified under current assets on a company's balance...
Floating Interest Rate
A floating interest rate is an interest rate that fluctuates over the tenure of a...
Holding Period
The holding period of a financial security refers to the duration between the time an...
Book Building
Book building is a method used to determine the issue price of a financial instrument,...
Lead Underwriter
The lead underwriter is the financial institution responsible for overseeing and managing an Initial Public...
Advance/Decline Line
The Advance/Decline Line is a popular market breadth indicator that helps investors track the overall...
