Average Rate Option

This Issue in United States

Average Rate Option

Concept of Average Rate Option in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An option (i.e. the right to buy or sell a financial instrument at some agreed conditions) where the settlement is based on the difference between the strike and the average price of the underlying instrument over a predetermined period. An average rate option is also known as an Asian option.

Resources

See Also

• Derivatives Contract