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   Shout Option
   















 

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Shout Option

(1) An option contract with the strike set at-or relative to-the spot price of the underlying at the time the option holder 'shouts' to fix the strike. See Deferred Strike or Strike Price Option. (2) Less frequently, an option contract with the settlement price set at the spot price in effect at the time the option holder 'shouts' to fix the settlement price. The settlement is not made until the scheduled expiration date. See Deferred Payment American Option. (3) A variation of a ladder option in which the holder has one opportunity to lock in a minimum payout during the life of the option. When the owner contacts the seller and 'shouts' to lock in the intrinsic value of the option at a minimum, the investor retains further potential to benefit from favorable moves, but is assured of a minimum payout. See also Ladder Option or Note (diagram).

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