lookback option
Definition
Call or put option whose strike price is not determined until the option is exercised. At the time of exercise, the holder can exercise the option at any underlying price that has occurred during the option's life. In the case of a call, the buyer will choose the lowest price, and in the case of a put, the buyer will choose the highest price. The premium on such options tends to be high since it gives the buyer great flexibility, and the writer has to take on a lot of risk.
This content can be found on the following page:
http://www.investorwords.com/2893/lookback_option.html
email to a friend
 print this definition
 cite this definition
 link to this page
Copy and paste this HTML in your website to link to this page
Related Research Articles from the InvestorGuide.com University
Options
Learn about call and put options, the components of an options contract, how to value and price options, and what the advantages and disadvantages of options to help you decide if they are the right investment for you.
Principles of Investing
Here are the seven fundamental principles of investing that every investor should know. Topics include knowing your current situation, goals and risk tolerance; getting your finances in order; thinking long term and focusing on stocks; researching and monitoring your investments; and knowing when and how to get financial help.
Buying and Selling
Learn the best time to buy or sell an investment. Also suggests templates for investment analysis and transaction records.
Featured Sponsor
|
