Balloon Option

(redirected from Balloon Options)

Balloon Option

An option contract in which the strike price increases by a certain ratio after the price of the underlying asset reaches a stated threshold. For example, if the underlying asset goes above $50 per unit, the strike price may increase by $3 for every extra dollar that the underlying reaches. This type of option is most common when the underlying asset is a currency.
References in periodicals archive ?
When it comes to balloon and no/low down options, African Americans and Hispanics report being more knowledgeable about no/low down payment and balloon options than Whites.