An option whose underlying security is a physical commodity that is not stock or futures. The physical commodity itself (a currency, treasury debt issue, commodity) - underlies that option contract. See also index option.
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An option contract on an asset that is an actual thing, as opposed to a stock or futures contract. Examples of underlying assets for physical options include commodities, currencies, and U.S. Treasury securities. Other than this feature, physical options are identical to other option contracts and can be used in a variety of option strategies.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
An option on a physical commodity, such as a currency, commodity, or U.S. Treasury debt, rather than on stock or futures.
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.