American Option

Business, Legal & Accounting Glossary

Definition: American Option

Quick Summary of American Option

This is an option that can be exercised on any business day prior to it’s expiry date.

What is the dictionary definition of American Option?

Dictionary Definition

An American option is a version of an options contract that allows holders to exercise the option rights at any time before and including the day of expiration.

Full Definition of American Option

The majority of options that are trade on most stock exchanges are American options.

With an American option, the holder can wait for the most advantageous price to exercise the option. He can exercise the option on any of the trading days up to the expiration date. Due to greater flexibility, American options are more valuable than European-style options, which can only be exercised at maturity.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
American Option. Payroll & Accounting Heaven Ltd. October 21, 2021
Chicago Manual of Style (CMS):
American Option. Payroll & Accounting Heaven Ltd. (accessed: October 21, 2021).
American Psychological Association (APA):
American Option. Retrieved October 21, 2021, from website:

Definition Sources

Definitions for American Option are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 10th August, 2019 | 1 Views.