 |
Definition of 'Exotic Option'
An option that differs from common American or European options in terms of the underlying asset or the calculation of how or when the investor receives a certain payoff. These options are more complex than options that trade on an exchange, and generally trade over the counter.
|
 |
Investopedia explains 'Exotic Option'
For example, one type of exotic option is known as a chooser option. This instrument allows an investor to choose whether the options is a put or call at a certain point during the option's life. Because this type of option can change over the holding period, it is not be found on a regular exchange, which is why it is classified as an exotic option.
Other types of exotic options include: barrier options, Asian options, digital options and compound options, among others.
|
-
There's one simple hurdle in the transition from stock to futures options: learning about product specifications.
Read More »
-
Plain vanilla? Exotic? Learn about the different option flavors and how they can be used.
Read More »
-
These unusual investment vehicles can reignite your interest in trading.
Read More »
-
-
Binary or digital options are a simple way to trade price fluctuations in multiple global markets.
Read More »
-
When economic data comes out, it can have a marked impact on the currency market. Find out how to profit.
Read More »
-
Understanding price influences on options positions requires learning delta, theta, vega and gamma.
Read More »
-
Read More »
-
Read More »
|
|
