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Derivatives




Fixed Strike Lookback Option


A lookback option whose payoff depends on the lookback price of the underlying asset during the life of the option. The option’s payoff is the positive difference between the best lookback price and a preset, fixed strike price. The option will be exercised if the difference between the highest price achieved by the underlying (if a call) or the lower price achieved by the underlying (if a put) and the strike price is positive (negative).



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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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