A Parisian option is a crossover between a barrier option and an Asian option. However, the payoff of a Parisian option doesn’t only depend on the final price of the underlying, but also on its price trajectory during the whole life span of the option. More specifically, this option will be either activated or terminated upon the underlying trading through a preset barrier level and staying above or below the barrier for a specified period of time before its maturity date.
Derivatives
See also
- What Does a Low Gamma of an Option Indicate?
- What Is the Difference Between a Digital Option and a Range Option?
- What Is the Difference Between Par Swap Rate, Swap Rate, and Forward Swap Rate?
- Why Is an Option a Zero-Sum Game?
- What Is the Difference Between Buying a Put and Selling Stock Short?
- How Do Currency Options Work?
- What Is a Limit Option?
- What Does a High Gamma of an Option Indicate?
- What Is the Role of Variation Margin (VM) in Derivatives?
- What Is the Most Common Type of Credit Derivative?
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