C
Capped Call
C
Capped Call
A
long
call position with a maximum payout-analogous in
structure
to a vertical bull
spread position
or an
equity risk reversal
. The terms under which the cap is exercised and the maximum call value may vary in different
contracts
and
markets
and should be checked carefully. Compare with
Floored Put
. See, for example, Bull Spread,
Capped Index Options (CAPS)
for
payoff
diagrams.
See also:
Vertical Bull Spread
Glossary
*
C