Lookback option

Lookback option,

Definition of Lookback option:

  1. Also known as a hindsight option, a lookback option allows the holder the advantage of knowing history when determining when to exercise their option. This type of option reduces uncertainties associated with the timing of market entry and reduces the chances the option will expire worthlessly. Lookback options are expensive to execute, so these advantages come at a cost.

  2. As a type of exotic option, the lookback allows the user to "look back," or review, the prices of an underlying asset over the lifespan of the option after it has been purchased. The holder may then exercise the option based on the most beneficial price of the underlying asset. The holder can take advantage of the widest differential between the strike price and the price of the underlying asset. Lookback options do not trade on major exchanges. Instead, they are unlisted and trade over-the-counter (OTC).

  3. In which the payout is based on the lowest (in case of a put) or the highest (in case of a call) level reached by the underlying asset or index during the options expiration period.

How to use Lookback option in a sentence?

  1. Lookback options are only available Over The Counter (OTC) and not on any of the major exchanges.
  2. These options are expensive to establish and the potential profits are often nullified by the costs.
  3. Lookback options are exotic options that allow a buyer to minimize regret.

Meaning of Lookback option & Lookback option Definition

Lookback Option,

What Does Lookback Option Mean?

  1. The definition of Lookback Option is: The lookback option, also called the lookback option, allows the holder to know the date when to use the option. This type of option reduces the uncertainty associated with entering the market and reduces the likelihood that the option will become useless. Analysis options are expensive to perform, so these benefits come at a price.

    • Analysis options are foreign options that buyers can use to reduce regret.
    • Analysis options are only available over the counter (OTC) and there are no major conversions.
    • These options are expensive to set up and the potential benefits often outweigh the costs.

Literal Meanings of Lookback Option

Option:

Meanings of Option:
  1. Anything that can be selected.

  2. Freedom, power or the right to choose.

  3. The right to buy or sell something for a certain price within a certain time.

  4. Aggressive sport in which the ball carrier has the option to run, pass, pass or play late.

  5. Transfer of players (in minor league teams) with retirement option.

  6. Not really

  7. Don't be honest

Sentences of Option
  1. Most of the time will be allocated to selected options, but each participant will gain experience in other areas.

  2. The Daily said that apart from the high cost, the layout of the building meant that the work, which included widening the corridor, was not a practical choice.

  3. It took Bell five years to go into commercial production. Therefore, it is impractical to rent it.

  4. He said that as a principal, he could not force the youth to wear uniforms, but the school hoped that parents would see this as a practical option.

  5. Now, patients are asked to choose between two options if they want to stay in the office.

  6. Unique panels are also an easy choice, as they are easy to clean from surfaces damaged by unsafe mortar lines.

  7. Protective cover This chair proved to be a practical choice to play a role in the new design.

  8. For losers, advisers were asked Tuesday night to choose between two options.

  9. It seems that after months of debate and political position, none of the four options have been chosen.

Synonyms of Option

course of action, alternative, possibility, recourse