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.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Comments