A COMPLEX OPTION that grants the buyer a payoff based on the geometric or arithmetic MEAN price of the UNDERLYING reference over a predetermined averaging period (i.e., ASIAN TAIL). The payoff can be determined by applying the average path to the price of the underlying (AVERAGE PRICE OPTION) or the STRIKE PRICE (AVERAGE STRIKE OPTION). Also known as AVERAGE OPTION.
More On This Topic
Link to This Definition
Did you find this definition of ASIAN OPTION helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary