Deferred Payment Option


DEFINITION of 'Deferred Payment Option'

An option with all the characteristics of an American vanilla option, with one exception: payment is deferred until the original expiration date.

BREAKING DOWN 'Deferred Payment Option'

The option can be exercised at any time; however, payment is deferred until the original expiration date of the option. These options are considered long term options, with expiration dates at least one year away.

  1. European Option

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

    An option whose payoff depends on the average price of the underlying ...
  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. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
  6. American Option

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