A type of investment where the performance difference between two indexes or other financial assets depends on the payment. The payout option is by changing the spread between the indexes or assets. These options are generally cash settled.
Investopedia explains multi index option Payment a multi-option of index depends on on market direction, rather a change in the spread. Consider for example a multi index option the probability the S & P 500 Canada's TSX Composite exceeds one year by five percentage points. After one year when the S & P-500 declined 2%, but the TSX decreased 9%, can still positive cash than S and - P-500 exceeded the TSX by seven percentage points. If the S & P-500 a year less than five percentage points surpasses, the option expires worthless.
Showing posts with label Multi. Show all posts
Showing posts with label Multi. Show all posts
Thursday, February 17, 2011
Subscribe to:
Posts (Atom)