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Derivatives




American-Style Exercise


An exercise method whereby the right to buy, sell or exchange the underlying asset, price, rate, or index, conferred on the holder (buyer) of a derivative contract or instrument, can be executed at expiration date or at any time before expiration. At each point up till expiration, inclusive, the holder of the derivative should decide whether to exercise or not. With respect to option contracts, all equity options and most index options offer American-style exercise.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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