American style option

This type of (financial) option is exercisable by the option holder, at the agreed strike price, at any time before the expiry date of the option.

American 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.