An alternative term for a lookback rate option; a lookback option whose payoff (and performance), at expiration (for a European version) or over its lifetime (for an American version) depends on the maximum rate (e.g., a stock price, or in the case of a lookback rate option, an exchange rate) realized over the option’s life (from the perspective of an option holder), after adjusting for the strike price (strike rate).
For a call option (in which case, a lookback price call), the maximum outcome is defined by the “positive” difference between the current market rate and the strike rate. For a put option (specifically, a lookback rate put), the maximum outcome is defined by the “positive” difference between the strike rate and the current market rate:
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