It stands for target redemption option; an exotic option that gives the holder the right to receive a stream of payments up to a maximum total accumulation value. For example, an option with 3 -year maturity may pay 6% of the initial price of its underlying asset, up to a total maximum of 10%, if the underlying trades above its initial value in each of the three years. This option would only have two payment maximum thresholds, after the second of which, it expires worthless.
January 31, 2024