Template:M summ Equity Derivatives 2.2
The 2002 ISDA Equity Derivatives Definitions contemplate three kinds of options:
- European Option: you can only exercise on the Exercise Date, usually the expiry date of the Transaction.
- American Option: you can exercise on any date during an Exercise Period — so you need also to specify a Commencement Date.
- Bermuda Option: you can exercise on specified Potential Exercise Dates only during an Exercise Period, so while it sort of might help to have a Commencement Date, you don’t strictly need one. Disappointingly, Bermuda Options don’t disappear without warning when on a routine training mission over Fort Lauder ... HANG ON I HAVE JUST REALISED OH MY GOD
To our way of thinking Americans are best AND YOU DON’T HEAR THE JC SAY THAT VERY OFTEN.[1]
- ↑ Actually, when it comes to rock ’n’ roll, you do.