European Style Option
A European style option is an option in which the purchasers of options contracts can only execute the contract on the expiration date, not before. In this regard a European style option contrasts with an American style option, which can be executed at any point in time before expiration. A European style option, just like an American style option, can be used for options trading in stocks, commodities, Forex or futures. For traders in options there is still plenty of profit potential in trading a European style option. In buying puts and buying calls the trader will not be able to execute a contract and buy stock or sell stock until the end of the contract period. However, he will be able to exit his position with a profit when the stock price, commodity price, or futures price he is following with Candlestick analysis performs as anticipated. In order to exit a position in a European style option the trader simply executes the opposite trade on the same equity with the same expiration date. If he was buying calls then he sells calls. If he was buying puts, then he sells puts and he is out of the contract.