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Cliquet Option
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Cliquet Option (1) Payout The French like the sound of 'cliquet' and seem prepared to apply the term to any remotely appropriate option structure. (1) Originally a periodic reset option with multiple payouts or a ratchet option (from vilbrequin à cliquet-ratchet brace). Also called Ratchet Option. See Multi-period Strike Reset Option (MSRO), Stock Market Annual Reset Term (SMART) Note. See also Coupon Indexed Note. (2) See Ladder Option or Note (diagram). Also called Lock-Step Option. See also Stock Upside Note Security (SUNS). (3) Less commonly, a rolling spread with strike price resets, usually at regular intervals. (4) An exploding or knockout option such as CAPS (from cliqueter-to knock). See Exploding Option.
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