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Specialty option
A type of option with non-traditional features, such as an unusual underlying, an exercise price that is not predetermined, or a more complex payoff structure than the difference between the exercise price of the option and the market price of the underlying at the option exercise date.
Exotic options are not generally traded on an organized market but rather over the counter, or thy are embedded into structured notes.
Synonyms and variations
- Exotic option
- Non-standard option
- Second generation option