# European and American options

Options can be divided into European and American options according to the method of execution. If the option can only be executed on the expiration date, it is called a European option; if the option can be executed at any time on and before the expiration date, it is called an American option.

# Call and Put options

According to the type of purchase and sale, options can be divided into call options and put options.

A call option is the right to "buy the underlying asset" at the strike price on the expiration date. The buyer of a call option bets on an increase in the price of the asset.

A put option is the right to "sell the underlying asset" at the strike price on the expiration date. The buyer of a put option bets that the price of the asset will fall.

# Expiry

According to the type of expiration date, options can be divided into daily options, weekly options, monthly options, quarterly options, annual options, etc.

# ITM, ATM and OTM options

According to the relationship between the strike price and the price of the underlying asset, options can be divided into in the money (ITM), at the money (ATM), and out of the money (OTM) option.

ITM option: a call option with a strike price less than the current price of the underlying asset, or a put option with a strike price greater than the current price of the underlying asset.

ATM option: call and put options with a strike price equal to the current price of the underlying asset (in practice, strict equality is not required, and options with a strike price close to the price of the underlying asset are generally referred to as ATM options).

OTM option: a call option with a strike price greater than the current price of the underlying asset, or a put option with a strike price less than the current price of the underlying asset.