Derivatives

Resettable Option

August 1, 2021
Derivatives

Reset Option

August 2, 2021

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The strike of an option contract that can be changed during the life of the option. For example, a commodity option is struck at $50. After a specific period of time (one month, two months, etc), the contract allows the strike to be adjusted by a certain percentage (say 10%) or to be the maximum of $50 and 10% over the spot price on the resetting date (resettable fixing date).

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