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Capped-style option

An over-the-counter option that is automatically exercised when the underlying closes at or above the exercise price plus a cap interval (for a call option), or at or below the exercise price minus a cap interval (for a put option), so that the holder's profit is capped.

The cap interval is established when the option is purchased.

Translations

Synonyms and variations

  • Cap option
  • Capped option