American Option
An option contract that may be exercised at any time from purchase through the expiration date, at the holder's sole discretion. Almost every option on a single US stock is American-style. American calls on dividend-paying stocks carry meaningful early-exercise risk for short writers around ex-dividend dates; American puts carry early-exercise risk when deep-ITM on hard-to-borrow names. The exercise style is printed on the contract specification at the exchange and is not negotiable -- it is a load-bearing risk-profile detail that retail traders routinely miss.
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Related terms
Asian Option · Barrier Option · Basket Option · Butterfly Spread · Calendar Spread · Cash-Secured Put
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