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Derivatives

  Derivatives   |   Terms
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  • February 17, 2022
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Compound Option

An exotic option (also called caput option) in which a call option is made on a put option, whereby it gives the holder the right to purchase another option. That is, this option entitles the holder to purchase a specific put when the price of its underlying assets goes down. This type of options only trades over the counter (OTC), and so, it is quite hard to get into a position with this option.

A cacall is is another variant of compound option.


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