A proposed option whose payoff is linked to the magnitude of volatility in a given market. In other words, the underlying asset of this option is a volatility index. The underlying index measures the volatility of the price of an underlying asset, and therefore, it is the underlying of an underlying that determines the payoff of a volatility 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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