An option that can be exercised on discrete dates before expiration. In other words, the holder has to mark two conditions for an exercise: the point on the timeline over the option’s life and the favorable market condition in which the option is in the money. For a call option, the favorable market condition means that the exercise price is below the market price of the underlying, while for a put option, it means that the market price is below the option’s exercise price.

It is also known as a Bermuda option, an Atlantic option, a modified American option, and so on.