Deferred Payment Option

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Dictionary Says

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.

Investopedia Says

Investopedia explains '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.

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