Editing Option style (section)

===Bermudan option===
*A '''Bermudan option''' is an option where the buyer has the right to exercise at a set (always discretely spaced) number of times. This is intermediate between a European option&mdash;which allows exercise at a single time, namely expiry&mdash;and an American option, which allows exercise at any time (the name is jocular: [[Bermuda]], a [[British overseas territory]], is somewhat American and somewhat European—in terms of both option style and physical location—but is nearer to American in terms of both). For example, a typical Bermudian [[swaption]] might confer the opportunity to enter into an [[interest rate swap]]. The option holder might decide to enter into the swap at the first exercise date (and so enter into, say, a ten-year swap) or defer and have the opportunity to enter in six months time (and so enter a nine-year and six-month swap); see [[Swaption#Valuation|Swaption: Valuation]]. Most exotic interest rate options are of Bermudan style.