European options and American options are divided according to the exercise time of the options. European options can only be exercised on the expiration date, while American options can be exercised at any time before the expiration date, that is to say, investors who hold American options before the expiration date can freely choose the time to exercise their rights.

option is a derivative, which gives the holder the right to buy or sell assets at a specific price in a specific time in the future. Options are divided into two categories, namely European options and American options.

European options refer to options that can only be exercised on the expiration date. Before the expiration date, investors can't choose to exercise the option at will, and they must wait until the expiration date to exercise it. European options are usually used in financial markets, such as stocks, bonds, commodity futures and other transactions.

unlike European options, American options can be exercised at any time before the expiration date. This means that investors who hold American options before the expiration date can choose the time to exercise their rights at any time and decide whether to exercise them according to the actual situation. For example, if the price of a stock suddenly rises sharply before it expires, investors may choose to exercise the right to buy the stock in advance, so as to buy the stock at a lower price.

because American options are more flexible, in many cases, their prices are higher than those of European options, and investors need to have stronger judgment and risk control ability to trade.