Atlas Options

DEFINITION of 'Atlas Options'

An equity-based exotic option from the family of mountain range options. Atlas options have a payout that is based on the performance of the underlying securities, which are stocks. At maturity, some of the best- and worst-performing stocks are removed from this group of underlying securities, at which point the payout is calculated on the remainder of the securities.

BREAKING DOWN 'Atlas Options'

Atlas options are typically only traded by sophisticated institutional investors who have the resources and risk tolerance to accept what can be an extremely complex security. As the time to maturity draws nearer, the price or value of an Atlas option may become more readily apparent as the top and bottom performers clearly separate themselves from the rest of the pack. These options were first introduced in the late 1990s, and were made up of European-based equities. Most are created as call options, with long terms to maturity.

RELATED TERMS
  1. Himalayan Option

    An exotic equity option belonging to a class known as mountain ...
  2. Annapurna Option

    A form of option contract from the "mountain range" series of ...
  3. As-You-Like-It Option

    A type of exotic option that allows the option holder to choose ...
  4. European Option

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

    The set of all the call options or all the put options for a ...
  6. Option Chain

    A form of quoting options prices through a list of all of the ...
Related Articles
  1. Stock Analysis

    Say Hello To Atlas Resource Partners

    Atlas Energy will be transferring assets to their new entity, Atlas Resource Partners.
  2. 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, ...
  3. Options & Futures

    Types of Options

    There are many different types of options. In addition to general put options and call option, we will discuss 13 different types of options. Some of these option types are better suited to day ...
  4. Options & Futures

    Exotic Options: A Getaway From Ordinary Trading

    Exotic options are like regular options, except that they have unique features that make them complex. These unusual investment vehicles can reignite your interest in trading.
  5. Options & Futures

    Options Basics: Types Of Options

    The distinction between American and European options has nothing to do with geographic location.
  6. Options & Futures

    Introduction - Day Trading and Options

    Options have not been a tradition part of day-trading strategy, but this is quickly changing.
  7. Options & Futures

    Stock Options: What's Price Got To Do With It?

    A thorough understanding of risk is essential in options trading. So is knowing the factors that affect option price.
  8. Options Traders

    An options trader is anyone who buys and sells options in the capital market. As options trading is most commonly conducted through online option trading brokers, it is also commonly known as ...
  9. Options & Futures

    Exploring European Options

    The ability to exercise only on the expiration date is what sets these options apart.
  10. Options & Futures

    Options Pricing: A Review Of Basic Terms

    The following is intended as a review of basic option terminology, which can be used as a reference as needed: American Options - An option that can be at any point during the life of the contract. ...
RELATED FAQS
  1. What's the difference between a regular option and an exotic option?

    Before learning about exotic options, you should have a fairly good understanding of regular options. Both types of options ... Read Answer >>
  2. Do options make more sense during bull or bear markets?

    Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain ... Read Answer >>
  3. Is it possible to trade forex options?

    Yes. Options are available for trading in almost every type of investment that trades in a market. Most investors are familiar ... Read Answer >>
  4. Do you have to be an expert investor to trade put options?

    Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined ... Read Answer >>
  5. 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 >>
  6. Why are options very active when they are at the money?

    Stock options, whether they are put or call options, can become very active when they are at the money. In the money options ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center