Question

Which of the following is false?

“American” options can be exercised anytime

“European” options can only be exercised at expiration

all actively traded options contracts are in standardized quantities of 100

an option cannot be bought through the Chicago exchange and sold through the New York exchange

Answer 1

Option D is false. Option can be bought through Chicago exchange, It is the platform where highest number of options are bought. And an option can also sold through NEW York Exhange. Both the exchange Chicago exchange and New York exchange provides a platform to buy and sell options in secondary market.

Therefore, Option D is the correct answer as it is only statement which is false.

American options can be exercised anytime, even before maturity, but European option can only be exercised at expiration. This is the major difference between both of these options.

All actively traded options contract are in standardized quantities of 100, where 100 shares of stocks = 1 option. Therefore, remaining three statements are correct.