Discrepancy European-style

FINRA FINRA SIE
1

I’ve noticed a bit of a discrepancy from the achievable material and Kaplan Qbank/online sources. Euro-style is described in achievable as only allowed to exercise at expiration. In the Kaplan Qbank, it is described: “European style contracts may only be exercised on the last day the contract trades before expiration.” For the purposes of the SIE, which should I use? Or perhaps they are saying the same thing and I’m misunderstanding. Thanks

Best,

Christian

1 Like
2

Hey Christian, they’re saying the same thing: it’s just the last day.

Settlement timelines and related issues can vary the real-world experience a bit, but it doesn’t matter for the exam.

The key point is:

  • American-style options can be exercised anytime
  • European-style options can only be exercised at expiration
1 Like
3

Thank you for the clarification, Justin!

2 Likes