Professional traders in options make use of a large range of potential strategies, often purchasing combinations of options that reflect particular expectations or cover several contingencies. Traded options can be bought and sold on an exchange, at all times, i.e. there is a trade in the options themselves. Traditional options , however, once purchased, cannot be resold. In a European option the buyer can only exercise the right to take up the option or let it lapse on the expiry date, whereas with an American option this right can be exercised at any time up to the expiry date.
European options are therefore cheaper than American options.
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