Caput
A type of exotic option that consists of a call option on a put option. Essentially it gives the holder the right to purchase another option. This type of option is also known as a "compound option". Investopedia Says:
The holder of a caput option has the right to purchase a specific put option in the event that the price of the underlying asset declines. The disadvantage of a caput option is that it only trades over-the-counter, so it is not as easy to get into a position with caput options as with regular vanilla options. Related Terms:
Call Option
Compound Option
Exotic Option
Over The Counter
Vanilla Option |