> For the complete documentation index, see [llms.txt](https://870.gitbook.io/knowledgebase/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://870.gitbook.io/knowledgebase/how-do-options-work/other-types-of-options.md). # Other Types of Options ## Expiration & Liquidity Options can also be categorized by their duration. Short-term options are those that expire generally within a year. Long-term options with expirations greater than a year are classified as [long-term equity anticipation securities](https://www.investopedia.com/terms/l/leaps.asp) or LEAPs. LEAPS are identical to regular options, they just have longer durations. Options can also be distinguished by when their expiration date falls. Sets of options now expire weekly on each Friday, at the end of the month, or even on a daily basis. Index and ETF options also sometimes offer quarterly expiries. ## American vs European Options [American options](https://www.investopedia.com/terms/a/americanoption.asp) can be exercised at any time between the date of purchase and the expiration date. [European options](https://www.investopedia.com/terms/e/europeanoption.asp) are different from American options in that they can only be exercised at the end of their lives on their expiration date. The distinction between [American and European options](https://www.investopedia.com/articles/optioninvestor/08/american-european-options.asp) has nothing to do with geography, only with early exercise. Many options on stock indexes are of the European type. Because the right to exercise early has some value, an American option typically carries a higher premium than an otherwise identical European option. This is because the early exercise feature is desirable and commands a premium. ## Exotic Options There are also [exotic options](https://www.investopedia.com/terms/e/exoticoption.asp), which are exotic because there might be a variation on the payoff profiles from the plain vanilla options. Or they can become totally different products all together with "optionality" embedded in them. For example, [binary options](https://www.investopedia.com/terms/b/binary-option.asp) have a simple payoff structure that is determined if the payoff event happens regardless of the degree. Other types of exotic options include knock-out, knock-in, barrier options, lookback options, [Asian options](https://www.investopedia.com/terms/a/asianoption.asp), and [Bermudan options](https://www.investopedia.com/terms/b/bermuda.asp). Again, exotic options are typically for professional derivatives traders. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://870.gitbook.io/knowledgebase/how-do-options-work/other-types-of-options.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.