Deferred Start Option

Any of a variety of options which are traded before their effective lives commence and, perhaps, even before their strikes and other terms are set. Typically, these options provide for selection of the strike and start date at the holder's option, constrained by a formula built into the option contract. Sometimes the terms are set entirely by formula based on spot prices or rates on selected dates. See, for example, Barrier Option, In Option, Deferred Strike or Strike Price Option.

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