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Comparison between European and American Options

In addition to some special characteristics that distinguish the European-style options than American-style, the deadline is what really matters to those who wish to trade!

In the American-style options, the holder may exercise the right during the period prior to expiry, as a result, he may decide at any time (depending on the type of option, call or put) to buy or sell the underlying asset.

However, European style options can exercise the right only at the expiry. This means that if the deadline is in 30 days, the option is exercisable only after a period of 30 days.

This is one of the reasons why most people prefer American-style options than the European type, especially when the purchase goal is not the exercise of the right (and then the purchase or sale of the underlying stock), but a target for speculative purposes.

European options are not flexible and not good for speculative objectives, that is why they are not particularly suitable for trading.
American options instead are a very flexible tool, this allows the opportunity to make more money and then sell the option when you are satisfied with the profit, or if the situation is risky.

Living in Europe not affects the possibility of negotiating American options because you can buy and sell both European and American options in both markets. The name is used to distinguish the two types and determine their origin.

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