# European Option

*Derivatives & Options — Finicade finance glossary*

An option that can only be exercised on its expiry date, not before. The simpler cousin of the American option, it's the type the Black–Scholes formula prices exactly.

**Related terms:** [American Option](https://finicade.com/glossary/american-options), [Black–Scholes Model](https://finicade.com/glossary/black-scholes), [Option](https://finicade.com/glossary/option)

Source: https://finicade.com/glossary/european-option