A lock-in option is an option that allows its holder to settle the option payoff at a time before the contracted option maturity, but transactions take place only at the expiration date. There are European lock-in options and American lock-in options. Whereas the lock-in time is prespecified in a European lock-in option, it is not contracted ex ante but can be chosen by the option holder at any time until the payment date in an American lock-in option. While European lock-in options are less costly than vanilla options because of smaller time values and delayed payment of option payoffs, American lock-in options permit an investor to fix the option payoff at a more favorable time than merely waiting until the option expires.