Lookback option

A lookback option is a path dependent option settles based upon the maximum or minimum underlier value achieved during the entire life of the option.

A lookback option is a type of exotic option that allows an investor to look back over the period to maturity and determine the ideal execution strategy for the lookback option. There are two primary types of lookback options: fixed and floating.

Definitions of ’lookback option’ and meaning of ’lookback option’ are from the book publication, QFINANCE - The Ultimate Resource, © 2009 Bloomsbury Information Ltd.

Lookback option
An option that allows the buyer to choose as the option strike price any price of the underlying asset that has occurred during the life of the option.

The payoff at maturity depends not just on the value of the underlying index at maturity, but at its value at several times during the contract's life (it could be an Asian option depending on some average, a lookback option depending on the maximum ...

In the Money
Inefficient Market
Lookback Option
Market versus Quote - MVQ
Market-With-Protection Order ...

Any of a wide variety of options with non-standard payout structures, including Asian options and Lookback options. Exotic options are mostly traded in the over-the-counter market.
Expiration
The day on which an option contract becomes void.

A method for calculating US taxes owed on income from controlled foreign corporations that was introduced by the Tax Reform Act of 1986.
Lookback option ...

Spreading (finance term)
At the Money (in banking)
In the Money (in banking)
Naked Position (business term)
Target Price (business term)
Long Leg (finance term)
Delta (in banking)
Lookback Option (finance term) ...

This technique is commonly used to price path dependent options, such as average rate and lookback options, where the option price is dependent on the underlying's price history.

lookback option A call or put option whose strike price is not determined until the option is... loophole A flaw in the law, which allows one to circumvent the law's intention without actually breaking that law.

See also: Values, Convertible Bond, Long-term debt ratio, Lessee, Maximum price