A contingent premium option where the holder pays no upfront premium. However, the premium gets paid in a series of amounts, at preset price levels, as the option moves toward expiration. If the option ends up in the money at expiration date, the premium on a step premium option will exceed that on a regular option (vanilla option).
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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