The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

CLIQUET OPTION Definition & Legal Meaning

Definition & Citations:

An OVERTHECOUNTER COMPLEX OPTION that allows the buyer to lock in gains at prespecified evaluation intervals if the option is INTHEMONEY at such points; gains are not relinquished if the market subsequently retraces. If the option is OUTOFTHEMONEY on an evaluation date the STRIKE PRICE resets ATTHEMONEY based on the new market level. Also known as a RATCHET OPTION. See also LADDER OPTION, SHOUT OPTION. CLO See COLLATERALIZED LOAN OBLIGATION.

Disclaimer

This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.