ABSTRACT
A call option gives its holder (buyer) the right, but not the obligation, to buy a certain quantity of an underlying asset at a fi xed price (exercise price) within a predetermined time period. Options that are exercised at any time until expiration are called American style options and options that can only be exercised during a limited
period before expiration or at maturity are called European style options. It should be noted that these names have no geographical meaning; hence, this categorization is based on applicable exercise periods.
