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.


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.

  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. Embedded Option

    A provision in a security that is an inseparable part of the ...
  4. Index Option

    A financial derivative that gives the holder the right, but not ...
  5. American Option

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

    An option that differs from common American or European options ...
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  3. Can mutual funds invest in options and futures?

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