Derivatives

Capped Index Options

February 10, 2022
Financial Analysis

Earnings Quality

February 10, 2022

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A capped option that constitutes a long call position in which a cap is placed on the maximum payout of the call. This call option provides for a fixed participation in the rise of an underlying, and hence its structure is similar to that of a position in a vertical bull spread or an equity risk reversal.

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