Chapter 7. Exotic Options
All derivatives are financial contracts, and in these contracts, there are far more features that can be agreed on than a simple right to buy or to sell. Complex payout structures can be engineered based on what-if scenarios; thus, the final payout of an exotic contract can be dependent on a whole set of circumstances. Often, even the path of the underlying has a serious influence on the final payout. Compared to these derivatives, the good old call and put options were soon seen simple, earning them a not too impressive nickname: plain vanilla.
Vanilla call and put options are like plain vanilla ice-creams, the simplest possible ice-cream without any fancy optional toppings. The expression "plain vanilla" is so strongly ...
Get R: Data Analysis and Visualization now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
