Basket option

A basket option is a financial derivative, more specifically an exotic option, whose underlying is a (weighted) sum or average of different assets that have been grouped together in a basket. For example, an index option, where a number of stocks have been grouped together in an index and the option is based on the price of the index.

Terms	Credit spread Debit spread Exercise Expiration Moneyness Open interest Pin risk Risk-free interest rate Strike price the Greeks Volatility

Vanilla options	Bond option Call Employee stock option Fixed income FX Option styles Put Warrants

Exotic options	Asian Barrier Basket Binary Chooser Cliquet Commodore Compound Forward start Interest rate Lookback Mountain range Rainbow Swaption

Combinations	Collar Covered call Fence Iron butterfly Iron condor Straddle Strangle Protective put Risk reversal

Spreads	Back Bear Box Bull Butterfly Calendar Diagonal Intermarket Ratio Vertical

Valuation	Binomial Black Black–Scholes model Finite difference Garman-Kohlhagen Margrabe's formula Put–call parity Simulation Real options valuation Trinomial Vanna–Volga pricing

Swaps

Exotic derivatives

Other derivatives

Market issues

This article is issued from Wikipedia - version of the 12/21/2015. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.

Basket option

See also