Russian Option

Filed Under:
Dictionary Says

Definition of 'Russian Option'


An option that gives the holder the right, but not the obligation, to buy a call or sell a put at the best price the underlying asset traded at, during the life of the option. Unlike other options, Russian Options have no expiration date, so the life of the option is whatever the holder chooses it to be.


Russian Options are also known as "reduced regret options" and are very similar to "lookback options."



Investopedia Says

Investopedia explains 'Russian Option'


Initially proposed by Shepp & Shiryaev in 1993, Russian Options are basically a form of the American perpetual put option. Due to their potential risk if held for long periods of time, Russian Options are generally recommended for more experienced investors. In addition, these options are generally more expensive than other forms of options and, thus, are not actively traded in the marketplace.

comments powered by Disqus
Hot Definitions
  1. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  2. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  3. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  4. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  5. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  6. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
Trading Center