TAPO

Dictionary Says

Definition of 'TAPO'

An option in which the profit or loss to the investor is based not solely on the price of the underlying asset at expiration, but on the difference between the strike price and the average price of the underlying asset during the option's term. A TAPO, Traded Average Price Option, (traded average price option) is also known as an Asian option.

Investopedia Says

Investopedia explains 'TAPO'

One exchange where TAPOs are commonly traded is the London Metal Exchange, a major marketplace for futures in non-ferrous metals such as aluminum, copper, lead and zinc. These call and put options come in contract lengths ranging from one to 27 calendar months and their settlement price is determined by the monthly average settlement price. TAPOs, traded options and futures are all used as hedging tools.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Option

    A financial ...
  2. Embedded Option

    A provision in a ...
  3. European Option

    An option that ...
  4. American Option

    An option that ...
  5. Asian Option

    An option whose ...
  6. Index Option

    A financial ...
  7. Exotic Option

    An option that ...
  8. Lookback Option

    An exotic option ...
  9. Put Option

    An option ...
  10. Knock-In Option

    A latent option ...

Articles Of Interest

  1. Pin Down Stock Price With Real Options

    How can you assign a value to what a company may do with its business in the future? We explain how it works.
  2. The "True" Cost Of Stock Options

    Perhaps the real cost of employee stock options is already accounted for in the expense of buyback programs.
  3. Should Your Options Go Naked?

    Compare naked strategies to credit spreads and see if the unlimited risk of going naked is worth it.
  4. The Importance Of Time Value In Options Trading

    Move beyond simply buying calls and puts, and learn how to turn time-value decay into potential profits.
  5. Options On Futures: A World Of Potential Profit

    There's one simple hurdle in the transition from stock to futures options: learning about product specifications.
  6. Ratio Writing: A High-Volatility Options Strategy

    Selling a greater number of options than you buy profits from a decline back to average levels of implied volatility.
  7. Options Trading Strategies: Understanding Position Delta

    Learn more about the position delta hedge ratio and how it can tell you the number of contracts needed to hedge a position in the underlying asset.
  8. 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.
  9. Derivatives 101

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

    Just because you're willing to accept a risk, doesn't mean you always should.

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