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   Strike Bonus Option
   















 

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Strike Bonus Option

The value added to a standard option by a lookback or strike reset feature. The value of a lookback option is equal to the value of the corresponding standard option plus the expected value of the cash flows necessary to exchange the initial option position for options with successively more favorable strikes. The expected value of these cash flows is called the strike bonus option. See also Lookback Option.

Glossary * S