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Overview
A structured option is each option that either:
- consists of two or more vanilla options in order to realize more sophisticated return than plain vanilla option, and/or
- a derivative that is highly complex and one of such derivative components is similar to an option, like exercise rights for one Party of a trade. Such derivative may contain other derivative types like swaps, forwards, futures, and some other features that help leverage return, minimize exposure etc., like buffers, caps, floors, knock-out provisions etc.
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Structured Option Types
Most common structured options / option strategies are:
- Option Straddle
- Option Strangle
- Option Collar
- Asian Option
- Rainbow Option
- Call Spread Option
- Digital Option
- Swaption
- Barrier Option
Option Straddle
Option Straddle is an option strategy where one party buys/sells both call and put option with the same Strike Price, underlying asset and Expiration Date.
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