Lookback Option

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Lookback option

An option that allows the buyer to choose as the option strike price any price of the underlying asset that has occurred during the life of the option. For a call option, the buyer will choose the minimum price; for a put option, the buyer will choose the maximum price. This option will always be in the money.

Lookback Option

An option contract where the holder is permitted to choose the strike price. That is, the buyer of a lookback call may choose a low strike price and the buyer of a lookback put may choose a high one. A lookback option is always in the money.

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