Path-dependent option - Financial definition
Financial acronyms
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Concise definition of the term path-dependent option
Option whose value at expiry is function of the price history of the underlying asset during the life of the option, rather than just the price of the underlying at expiry. Hence, the option's final value depends on the path taken by the underlying in terms of market price.
Comprehensive definition of the term path-dependent option
Path-dependent option types include:
- Lookback options
- Chooser options
- Barrier options
- Average options
- Ratchet options