User at 01:50, 2 June 2023

2023-06-02T01:50:03Z

User at 14:40, 16 December 2022

2022-12-16T14:40:57Z

User: Created page with "'''Content Coming Soon'''"

2018-12-04T14:34:07Z

Created page with "'''Content Coming Soon'''"

New page

'''Content Coming Soon'''

← Older revision		Revision as of 01:50, 2 June 2023
Line 1:		Line 1:
−	An Asian option is an option ~~type where~~ the payoff depends on the average price of the underlying asset over a certain period ~~of time~~ as opposed to ~~standard~~ options (American and European) where the payoff depends on the price of the underlying asset at a specific point in time (~~maturity~~)<ref>[https://www.investopedia.com/terms/a/asianoption.asp What Is an Asian Option? How They Work Vs. Standard Options]</ref>	+	An Asian option is a type of option contract in which the payoff depends on the average price of the underlying asset over a certain period as opposed to the traditional options (American and European), where the payoff depends on the price of the underlying asset at a specific point in time (expiration). <ref>[https://www.investopedia.com/terms/a/asianoption.asp What Is an Asian Option? How They Work Vs. Standard Options]</ref>
		+
		+	There are two types of Asian options:
		+
		+	#'''Average price option:''' The payoff of such an option depends on the difference between the average price of the underlying and the strike price. If the asset's average price over the term of the option is higher than the strike price (in the case of a call), or lower than the strike price (in the case of a put), the option will yield a payoff.
		+
		+	#'''Average strike option:''' The payoff of such an option depends on the difference between the price of the underlying at maturity and a strike price that is defined as the average price of the underlying over the life of the option.
		+
		+	Asian options are commonly used by commodities traders who want to limit their exposure to price volatility. Due to averaging, Asian options reduce the risk of market manipulation of the underlying asset at maturity.
		+
		+	The benefits of Asian options include lower volatility, reduced costs, and protection against market manipulation. However, it can also be seen as a disadvantage as it doesn't provide unlimited profit potential as traditional options do. For example, even if the underlying asset's price rises significantly, the average price might be lower, leading to a lower return.
		+
		+	An example of an Asian option in practice could be an oil producer that wants to hedge against the future price changes of oil. Using an Asian option, they can mitigate the risk of extreme price changes in the oil market.
		+
		+
		+

← Older revision		Revision as of 14:40, 16 December 2022
Line 1:		Line 1:
−	~~'''Content Coming Soon'''~~	+	An Asian option is an option type where the payoff depends on the average price of the underlying asset over a certain period of time as opposed to standard options (American and European) where the payoff depends on the price of the underlying asset at a specific point in time (maturity)<ref>[https://www.investopedia.com/terms/a/asianoption.asp What Is an Asian Option? How They Work Vs. Standard Options]</ref>
		+
		+
		+
		+	==See Also==
		+	*[[Business Value]]
		+
		+
		+
		+
		+
		+	==References==
		+	<references />

Asian Option - Revision history

User at 01:50, 2 June 2023

User at 14:40, 16 December 2022

User: Created page with "'''Content Coming Soon'''"