1. American option. American option refers to an option that can exercise its rights at any time within the specified validity period. Option buyers can exercise their rights on the expiration date of the option contract or any trading day before the option expiration date.

2. European options. European option refers to the option that the Japanese side can exercise its rights when the specified contract expires. The option buyer cannot exercise his rights before the expiration date of the option contract, and the option contract will automatically become invalid after the expiration.

Excerpted from The Course of Futures Market, edited by China Futures Association.