What is FORWARD START OPTION?

An OVERTHECOUNTER COMPLEX OPTION that is contracted on trade date t to commence on forward date t+1, with the forward start date, STRIKE PRICE, and final maturity parameters established on trade date. Once the forward date is reached a conventional EUROPEAN OPTION comes into existence.

More On This Topic



Link to This Definition
Did you find this definition of FORWARD START 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