Options are a derivative whereby the buyer gets the right (but not the obligation) to purchase the underlying asset. The sale is carried out either at a pre-agreed price, or at an unfixed price, but calculated according to a formula previously determined by the parties.
By the time of execution, options are divided into three types:
- European, when the fulfillment of obligations occurs on the last day of the period specified in the contract.
- American, in which the right to redemption can be exercised on any day of the contract.
- Quasi-American, when the contract is repaid at specific time intervals. The interval can be one or several.