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Old 1st July 2012, 09:52 AM
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Default American vs European Options



All the options that are visible to me are either CE or PE. There is no CA/PA. Does this mean Indian markets don't trade in American options?

I have referred some websites but I don't really understand as to what is the difference in them?

Please help.
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Old 1st July 2012, 11:09 AM
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An American Option can be exercised on any day before expiry (including the expiry day).

A European Option can be exercised only on expiry day.

According to SEBI's norms, an exchange can use American options as well as European options.

There are no American options in the Indian stock market.

NSE had American options for individual stocks, the discontinued them after 2010.

All January 2011 stock options were European.

Quote:
The National Stock Exchange (NSE) has decided to switch to European style stock option for all contracts expiring on January 27, 2011 and onwards.

The decision comes close on the heels of the market regulator giving exchanges the flexibility to offer either European style or American style stock options contracts.
NSE to launch European style stock option contracts
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