Derivatives

Holder Extendible Option

September 28, 2021
Islamic Finance

Difference Between Conventional Audit and Islamic Audit

September 28, 2021

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An option where the holder is long put on the worst performing stock (asset) among a specified number of stocks (assets), i.e., the basket. The holder receives the payoff based on the performance of the worst (lowest) return in the basket (also an indice).

This type of options is usually priced by using a Monte Carlo process.

It is also known as a worst-of option.

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