Average Rate Options: Basics
Interactive

Average Rate Options: Basics

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

Average rate options, or Asian options as they are also known, use either the average of the underlying price or the strike price over the specified period to determine the payoff. We discuss the two types of average rate option, and demonstrate using an example the advantages that can be gained from using this type of exotic option.

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