The National Stock Exchange (NSE) will now offer European-style contracts instead of the American-style stock options, Business Standard reports. The exchanges’ stock option contracts expiring on or after Jan. 27, 2011 will follow the European style. The European style options can be settled only on the day of expiry, while the American-style options can be squared off before the expiry date. The European-style stock options, which are compatible with cash-settled derivatives, reduce the overnight risk for uncovered sellers of stock options.

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