American option

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American option

An option that may be exercised at any time up to and including the expiration date. Related: European option

American Option

An option contract that may be exercised at any time on or before the expiration date. For example, if one buys an American call giving him/her the right to buy shares in X expiring on the final Friday in March, the call may be exercised at any time on or before the final Friday in March. The differentiating feature of an American option is the fact that its value varies according to the value of the underlying asset over the life of the contract. This means that a holder may wait for an advantageous price and exercise the option. This contrasts with a European-style option, which may only be exercised on the expiration date.

American option

A put or call option that permits the owner to exercise the option at any time on or before the expiration date.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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Mathematical aspects and types of American-style options appear in the appendices.

Options: Trading Strategy and Risk Management

Linear complementarity problems arise from so-called American-style options. A 2D convection-diffusion type operator is discretized with the help of second order upwind discretizations.

linear complementarity problems, American-style options, nonlinear multigrid, projected Gauss-Seidel, iterant recombination, second-order upwind discretization, Fourier analysis AMS subject classifications.

An American-style option. With the components introduced in Section 3, we now solve an LCP problem from American-style options with stochastic volatility.

On multigrid for linear complementarity problems with application to American-style options