Asset-Or-Nothing Call Option

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.

BREAKING DOWN '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. Asset-or-Nothing Put Option

    An option payoff that is equal to the asset's price if the asset ...
  2. Average Price Call

    A type of option where the payoff is either zero or the amount ...
  3. Average Price Put

    A type of option where the payoff depends on the difference between ...
  4. Cash-Or-Nothing Call

    An exotic option whose payoff is a predetermined amount (sometimes ...
  5. Strike Price

    The price at which a specific derivative contract can be exercised. ...
  6. Bear Call Spread

    A type of options strategy used when a decline in the price of ...
Related Articles
  1. Options & Futures

    What's the Strike Price?

    The strike price is the price at which a derivative can be exercised, and refers to the price of the derivative’s underlying asset. In a call option, the strike price is the price at which the ...
  2. Options & Futures

    Want to Day Trade? Try Binary Options Or Spread Betting

    Interested in Day Trading? These two derivative products are growing in popularity due to their profit potential and small trading capital required.
  3. Options & Futures

    Exploring The World Of Exotic Options

    Exotic options provide investors with new alternatives to manage their portfolio risks and speculate on various market opportunities. The pricing for such instruments is considerably complex, ...
  4. Options & Futures

    Getting Acquainted With Options Trading

    Learn more about stock options, including some basic terminology and the source of profits.
  5. Active Trading

    How To Manage A Bull Call Spread

    A bull call spread, also called a vertical spread, involves buying a call option at a specific strike price and simultaneously selling another call option at a higher strike price.
  6. Options & Futures

    When Should I Sell A Put Option Vs A Call Option?

    Beginning traders often ask not when they should buy options, but rather, when they should sell them.
  7. Trading Strategies

    A Guide Of Option Trading Strategies For Beginners

    Options offer alternative strategies for investors to profit from trading underlying securities, provided the beginner understands the pros and cons.
  8. Options & Futures

    The Basics of Options Profitability

    The adage "know thyself"--and thy risk tolerance, thy underlying, and thy markets--applies to options trading if you want it to do it profitably.
  9. Options & Futures

    Profiting From Stock Declines: Bear Put Spread Vs. Long Put

    If you're bearish, you should compare the risk/reward characteristics of these two strategies.
  10. Options & Futures

    How To Build Valuation Models Like Black-Scholes (BS)?

    Want to build a model like Black-Scholes? Here are the tips and guidelines for developing a framework with the example of the Black-Scholes model.
RELATED FAQS
  1. How does the term 'in the money' describe the moneyness of an option?

    Find out what in the money means about the moneyness of call or put options and what it indicates about the relationship ... Read Answer >>
  2. How do I set a strike price for an option?

    Learn about the strike price of an option and how to set a strike price for call and put options depending on risk tolerance ... Read Answer >>
  3. What is the difference between in the money and out of the money?

    Learn about how the difference between in the money and out of the money options is determined by the relationship between ... Read Answer >>
  4. How are call options priced?

    Learn how aspects of an underlying security such as stock price and potential for fluctuations in that price, affect the ... Read Answer >>
  5. Can an option have a negative strike price?

    The simple answer is that, at least when it comes to exchange traded options, an option can't have a negative strike price ... Read Answer >>
  6. How do I change my strike price once the trade has been placed already?

    Learn how the strike prices for call and put options work, and understand how different types of options can be exercised ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center