options, due to the early exercise feature, may trade at a premium to European
style options. To compute the price of an American put option
on an equity underlyer with dividends requires special techniques. Note that Put-Call Parity
does not apply for American options.
It is rare to actually exercise an exchange traded American style option, such as an option on Eurodollar Futures
One can consider the American option as a particular kind of Bermudan Option
. A Bermudan
option is exercisable on a particular set of dates, for example, the first of the month.