The use of options has increased dramatically for many years as a way to profit or hedge fluctuations in stock prices. Not only can options be traded with stock as underlying asset, they are also traded on the foreign exchange, interest rates and various indexes.
There are two types of options, American and European. American options can be exercised at any time prior to the expiration date of the option. However, European options can be exercised only on the expiration date. Shelf life follow these three cycles, the January, February and March. In January, the cycle consists of the first month of each quarter (January, April, July and October); in February, the series consists of the second month of each quarter (February, may, August and November); and the March cycle consists of the last month of each quarter (March, June, September and December).
For the difference between American and European options, there are also more specific conditions relating to the expiration. Because the expiration dates usually are identified only after a month, the exact date is determined by the expiration month, which is used as an exact term. The deadline for both types of options on Saturday after the third Friday of the expiry month. The investor usually has to 4:30 PM Central time on the third Friday of the month to teach his or her broker to exercise an option.
To learn more about the opportunities to learn the basics of options trading Tutorial four advantages of binary options and stock trading compared to the aftermarket options I and Part II.