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As we delve into the world of finance, it's important to understand the nuances of options contracts. Today, we will be discussing the European option, a type of options contract that is limited to its expiration date. This means that the holder has the right to buy or sell an underlying asset at a predetermined price, but only on the expiration date. It's important to note that this differs from the American option, which allows for exercise at any time before expiration. Understanding these distinctions is crucial in navigating the world of financial investments.
