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Ladder Option or Note
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Payout of a Ladder Option or Note at Expiration An index or currency warrant or option or equity index-linked note that provides an upward reset of its minimum payout when the underlying touches or trades through certain steps or threshold levels or attains a certain level on designated reset dates. For example, if the underlying trades through a price 35 percent above the strike, the holder of the warrant may be guaranteed a minimum payout equal to the value of the warrant at that price even if the index subsequently declines. A series of steps can ratchet the minimum payout up the ladder, providing protection from a later decline in the index. Also called Lock- Step Option, Step-Lock Option or Note, Cliquet Option (2) (diagram), Ratchet Option. See Infinite Ladder Option. See also Shout Option (3).
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