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Derivatives




Coupe Option


An option whose strike price periodically resets to the lowest of an underlying’s price and the previous strike price. This option can be viewed as a set of options with a total premium determined at initiation. However, the payment of payout on each option can be made at the expiration date of the last option or at the end of each reset interval. With these features, holding a coupe option costs less than purchasing a cliquet option.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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