Option Style - Equity Derivatives Provision

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2002 ISDA Equity Derivatives Definitions

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2.2 in a Nutshell

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Section 2.2. Option Style.
2.2(a) American Option. “American Option” means an Option Transaction, other than a Bermuda Option, pursuant to which the right or rights granted are exercisable on any Scheduled Trading Day during an Exercise Period that consists of more than one Scheduled Trading Day.
2.2(b) Bermuda Option. “Bermuda Option” means an Option Transaction pursuant to which the right or rights granted are exercisable only on the Potential Exercise Dates during the Exercise Period and on the Expiration Date.
2.2(c) European Option. “European Option” means an Option Transaction pursuant to which the right or rights granted are exercisable only on the Expiration Date.

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Overview

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Here we find ISDA’s crack drafting squad™ in “reciting the lore of the market” mode.

Summary

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The 2002 ISDA Equity Derivatives Definitions contemplate three kinds of options:

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See also

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References