How Does the Expiration Style (American Vs. European) Affect OTM Options?

The expiration style defines when an option can be exercised. American-style options can be exercised any time up to expiration, while European-style options can only be exercised on the expiration date.

For OTM options, the difference is largely theoretical, as it is never rational to exercise an OTM option. Therefore, the style does not practically affect the value or outcome of an OTM option.