Asian Tail

AAA

DEFINITION of 'Asian Tail'

An option feature whereby a reference price is activated at the end of an option should the underlying fall below a specified average before option expiry.

INVESTOPEDIA EXPLAINS 'Asian Tail'

This method of averaging the level of the underlying protects the investor from sudden and adverse price movements.

RELATED TERMS
  1. Balloon Option

    An option contract where the strike price increases significantly ...
  2. Cliquet

    An extended exotic option that periodically settles and resets ...
  3. Exotic Option

    An option that differs from common American or European options ...
  4. Vanilla Option

    A financial instrument that gives the holder the right, but not ...
  5. Underlying

    1. In derivatives, the security that must be delivered when a ...
  6. Mid-Atlantic Option

    An option that can be exercised at different times during the ...
Related Articles
  1. Options Basics Tutorial
    Options & Futures

    Options Basics Tutorial

  2. Dragons, Samurai Warriors And Sushi ...
    Bonds & Fixed Income

    Dragons, Samurai Warriors And Sushi ...

  3. What do all of the letters in a stock ...
    Options & Futures

    What do all of the letters in a stock ...

  4. The Basics of Options Profitability
    Options & Futures

    The Basics of Options Profitability

comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
Trading Center