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Canary option - Financial definition

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  Concise definition of the term Canary option

This term refers to the exercise style of an option where the option holder can exercise the option at quarterly dates, but not before a determined time period has elapsed.

  Comprehensive definition of the term Canary option

This exercise style is an intermediate between Bermudan and European exercise styles.
As for Bermudan options, the name Canary option comes from a geographical location - the Canary Islands - and has been chosen in analogy to the geographical situation of these Islands: between the Bermudas and the European continent.

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