What Is the Difference between an American and European Style Crypto Option?

The primary difference between American and European style crypto options lies in their exercise rights. An American style option grants the holder the right to exercise the contract at any time up to and including the expiration date.

This flexibility is valuable but often results in a higher premium. A European style option, conversely, can only be exercised on the expiration date itself.

Both styles are used in crypto derivatives, but the European style is often preferred for futures and options on perpetual swaps due to its simpler settlement and lower risk of early exercise manipulation.