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Derivatives




Average Strike Rate Option


An option in which settlement or payment on exercise depends on the difference between the cash price or rate at expiration date and an average strike (exercise) price or rate prespecified over the option maturity. This type of option is usually embedded in employee stock options or warrants.

It is also referred to as an average strike option and floating strike 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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