exotic option

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Exotic option

Refers to options that are more complex than simple put or call options. For example, a Caput is a call option on a put option. Exotic options trade over-the-counter.

Exotic Option

Any option contract that is not an American or European option. That is, an exotic option contains some provision that makes it different from a straightforward option contract with a strike price, underlying asset, and expiration date. For example, a chooser option allows the holder to decide whether the contract is a call or a put at some point over the contract's life. Also, an Asian option has no set strike price and is calculated as the average of some price listed in the contract and the market value of the underlying asset at the time of exercise. Most exotic options trade over-the-counter because their provisions make them too complex for the regulations of exchanges.

exotic option

An option with a nonstandard feature. A lookback option that allows the owner flexibility in selecting an exercise price is an example of an exotic option. Exotic options are traded in the over-the-counter market.
References in periodicals archive ?
To mitigate risk, enhance transparency and increase capital efficiency we need a more dynamic system that can provide consistent analytics and a single view of xVA risk across our entire portfolio of vanilla and exotic instruments.
The vast cultural and geographic expanse of the continent is encompassed into fourteen compositions that fuse exotic instruments, Taoist mysticism, and Dharmic philosophy with the forms and tonality of Western music.
We now have an exciting new collection of exotic instruments so the students will be able to get hands-on experience.
The composer added exotic instruments -- the harp, xylophone, bells and gong -- to evoke the emotions of the skies and of space travel.
At the end of "The Cat's Baton Is Gone" is a wonderful illustrated Glossary which describes all the exotic instruments and also defines many musical terms.
With Numerix CrossAsset Server, the bank achieved real-time pricing on its entire portfolio of trades, half of which were exotic instruments requiring hybrid modeling to capture the necessary risk parameters.
We used sleigh bells on Jingle Bells, coconut shells for donkey hooves on Little Donkey, but also exotic instruments like Chinese temple blocks, Kora and Oud, to add just a little touch of the East to our Western delights.
Inside the stone building, the duo recorded an exquisite audio journey that's classic Dead Can Dance, with rich vocals, sweeping strings, and exotic instruments.
Once the property bubble in the US burst, the banks that invested in those exotic instruments ended up with worthless paper.
MARISK chose F3 because it has the flexibility to value exotic instruments from any asset class, including Islamic and hybrid derivatives.
The program features virtuosos on exotic instruments including the dizi transverse flute and the erhu, a fiddle.
On his missions around the French colonies, Cras spent time learning exotic instruments and studying other musical systems.