European Option

A European option is a type of options contract that can only be exercised on the expiration date, unlike American options, which can be exercised at any time before the expiration. For example, if an options trader buys a European Call Option that expires on 01-01-2023, they can only exercise the option to buy the underlying asset on that specific date, 01-01-2023. In India, only European options are available for trading in the derivatives market. This limitation is important for traders to consider as it affects their ability to exercise options based on market movements prior to the expiration date.