An option whose payoff depends on the performance of two different assets (one primary, and the other secondary). The option will be in the money when the primary asset and the secondary asset stage a favorable performance against a specific level or benchmark. This option can also be contingent on the level of interest rates.

The contingency option should not be confused with the contingent option (an option in which the premium payment is contingent upon the option being exercised. Otherwise, it is costless, and the seller receives no payment for the right sold).

This option is also known as a contingent equity option.