What It Means
A European option can only be exercised on its expiry date itself, not any day before it, even if it's deep in the money. Every stock and index option traded on NSE and BSE is European style. American-style options, used in some other markets including US equity options, can be exercised any day up to expiry instead.
In practice this rarely affects Indian traders directly, since almost nobody exercises options manually. Most traders square off, buying back or selling their position, before expiry rather than holding to exercise. The distinction mostly matters for understanding why NSE/BSE options settle the way they do, and for traders comparing notes with markets where early exercise is possible.
Warning
Assuming you can "cash in" an in-the-money option early the way some overseas markets allow. Indian options don't support early exercise — your only way out before expiry is to square off the position in the market.
Related Terms
- Options Expiry — the one date a European option can be exercised on
- Call Option
- Put Option