An option (specifically a dispersion option) which gives the holder the right to exchange one asset for another. It is a type of rainbow option, where the payoff depends on two correlated variables. Essentially, this option represents a spread option with a strike price equal to zero. A spread option is an option whose underlying is a spread such as a price spread, credit spread, calendar spread, etc.

Outperformance options are commonly traded in foreign exchange markets, bond markets and stock markets. Margrabe option, exchange option, and exchangeable option are varying names of an outperformance option.