Caput

Dictionary Says

Definition of 'Caput'

A type of exotic option that consists of a call option on a put option. Essentially, a caput gives the holder the right to purchase another option. This type of option is also known as a "compound option".
Investopedia Says

Investopedia explains 'Caput'

The holder of a caput option has the right to purchase a specific put option in the event that the price of the underlying asset declines. The disadvantage of a caput option is that it only trades over the counter, so it is not as easy to get into a position with caput options as with regular vanilla options.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Exotic Option

    An option that ...
  2. Compound Option

    An option for ...
  3. Call Option

    An agreement ...
  4. Over-The-Counter - OTC

    A security ...
  5. Vanilla Option

    A financial ...
  6. Volatility

    1. A statistical ...
  7. Risk Capital

    Investment funds ...
  8. Price Risk

    The risk of a ...
  9. Cum Rights

    A shareholder of ...
  10. Security

    A financial ...

Articles Of Interest

  1. Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.
  2. 20 Tools For Building Up Your Portfolio

    The only real difference between you and Warren Buffett is a few well-chosen stocks, and the billion-dollar fortune is the result.
  3. What's the difference between a regular option and an exotic option?

  4. What do all of the letters in a stock option ticker symbol mean?

  5. Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.
  6. Derivatives 101

    Learn how to use this type of investment as an alternative way to participate in the market.
  7. Risk Tolerance Only Tells Half The Story

    Just because you're willing to accept a risk, doesn't mean you always should.
  8. Finding Your Investing Comfort Zone

    Choosing the right investments for you is the best way to feel comfortable with your portfolio.
  9. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.
  10. Simplify Your Portfolio

    Faced with an overabundance of choices, many investors forget to stick to the basics.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center