Asian Option


DEFINITION of 'Asian Option'

An option whose payoff depends on the average price of the underlying asset over a certain period of time as opposed to at maturity. Also known as an average option.

BREAKING DOWN 'Asian Option'

This type of option contract is attractive because it tends to cost less than regular American options.

An Asian option can protect an investor from the volatility risk that comes with the market.

  1. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  2. European Option

    An option that can only be exercised at the end of its life, ...
  3. Option

    A financial derivative that represents a contract sold by one ...
  4. Exotic Option

    An option that differs from common American or European options ...
  5. Average Price Call

    A type of option where the payoff is either zero or the amount ...
  6. American Option

    An option that can be exercised anytime during its life. American ...
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