Asset-Or-Nothing Call Option

AAA

DEFINITION of 'Asset-Or-Nothing Call Option'

A derivative security for which there is no payoff unless the underlying asset's price exceeds the strike price. With an asset-or-nothing call option, the payoff is equal to the asset's price, as long as the asset's price exceeds the strike price. If the asset's price remains below the strike price, the option expires as worthless.

INVESTOPEDIA EXPLAINS 'Asset-Or-Nothing Call Option'

The payoff structure of an asset-or-nothing call option is different from that of a regular (plain vanilla) option, which pays the difference between the exercise (strike) price and market price at expiry. The opposite of an asset-or-nothing call option is an asset-or-nothing put option, which pays a fixed amount if the asset's price remains below the strike price and pays nothing otherwise. Asset-or-nothing options are classified as binary options because there is either a fixed payoff or no payoff at all.

RELATED TERMS
  1. Binary Option

    A type of option in which the payoff is structured to be either ...
  2. Call Option

    An agreement that gives an investor the right (but not the obligation) ...
  3. Asset-or-Nothing Put Option

    An option payoff that is equal to the asset's price if the asset ...
  4. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
  5. Vanilla Option

    A financial instrument that gives the holder the right, but not ...
  6. Strike Price

    The price at which a specific derivative contract can be exercised. ...
Related Articles
  1. Options & Futures

    The Basics Of Covered Calls

    Learn how this simple options contract can work for you, even when your stock isn't.
  2. Options & Futures

    An Alternative Covered Call Options Trading Strategy

    This different approach to the covered-call write offers less risk and greater potential profit.
  3. Options & Futures

    Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.
  4. Options & Futures

    Understanding Option Pricing

    Take advantage of stock movements by getting to know these derivatives.
  5. Options & Futures

    What is spread hedging?

    Learn about one of the most common risk-management strategies options traders use, called spread hedging, to limit exposure to harmful stock movements.
  6. Options & Futures

    What role does intrinsic value play in put options?

    See why the concept of intrinsic value is so important in options trading and how investors use it to evaluate the worth of their options contract.
  7. Options & Futures

    What are the most common momentum oscillators used in options trading?

    Read about some of the most common technical momentum oscillators that options traders use, and learn why momentum is a critical concept for options trading.
  8. Options & Futures

    How are Bollinger BandsĀ® used in options trading?

    Use Bollinger Bands to identify volatility changes and place options trades at the right time; profit in bull or bear markets using these strategies.
  9. Options & Futures

    Stock Futures vs Stock Options

    A full analysis of when is it better to trade stock futures vs when is it better to trade options on a particular stock. A quick overview of how each of them works and why would a trader, investor, ...
  10. First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?
    Options & Futures

    Stock Safety: Top 3 Ways to Limit Your Losses

    First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?

You May Also Like

Hot Definitions
  1. Christmas Tree

    An options trading strategy that is generally achieved by purchasing one call option and selling two other call options at ...
  2. Christmas Club

    A short-term savings account that usually pays out the full account balance to its account holders once each year, right ...
  3. Boston Snow Indicator

    A market theory that states that a white Christmas in Boston will result in rising stock prices for the following year. For ...
  4. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  5. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  6. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
Trading Center