Skip to main content

What Is the Primary Difference between a European and an American Option?

The key difference lies in the exercise rights. A European option can only be exercised on its expiration date.

An American option, however, grants the holder the right to exercise at any time up to and including the expiration date. This flexibility makes American options generally more valuable than European options, all else being equal.

What Is the Difference between American and European Style Options Exercise?
What Is the Difference between American and European Options, and Why Does the Black-Scholes Model Only Apply to European Options?
What Is the Primary Difference between American and European Style Options in the Crypto Derivatives Space?
What Is the Difference between American and European Style Crypto Options?