hassan

There are logistical differences, ie: American options usually on exchanges whereas European options are usually OTC and the monthly expiration dates. But, for CFA the only relevant difference is the main one - the value of having the ability to exercise early. There are only a few circumstances where exercising a call early is of value - the main one being right before a dividend is issued that would cause a drop in value large enough to entice early exercise.

The other situations where early exercise is valuable are very specific and limited - involving specific types of options on specific assets, so, they aren't really relevant.

Bottom Line: The only real reason to exercise a call option early as opposed to just selling it is if a dividend issue is coming up where the dividend value is greater than whatever time value is left.