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.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The sound of exotic instruments echoed through Elgin yesterday during a celebration of international music.
Music for the series' various locales (including Cairo, London, Madrid, and Turkey) was flavored with exotic instruments such as the Hungarian cimbalom, Spanish guitar, Turkish flutes, and Arabic percussion.
Johnson used recognizable instruments like acoustic and electric guitars, but also captures unique sounds with exotic instruments such as the Erhu, Guitarviol, and Ronroco.
We now have an exciting new collection of exotic instruments so the students will be able to get hands-on experience."
Very simply, the Central Bank will go about buying assets, ranging from short-term and long-term bonds to more exotic instruments like mortgage backed securities (MBS), in exchange for dollar bills - the liquidity.
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.
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. Perry's deep, resonating vocals are present as well as Gerrard's famous "glossolalia," the word she uses to describe her flowing singing style of self-created words/tones, reminiscent of Coeteau Twins singer Elizabeth Fraser.
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.