Index Option

Posted in Finance, Accounting and Economics Terms, Total Reads: 838

Definition: Index Option

An index option is a financial derivative instrument in which the owner has a right to trade a collection of stocks at a pre-decided price after a fixed duration.

The stocks traded in this option are the indexes like S&P 500 index, Dow & Jones index, Nasdaq index, etc. and this is the difference between index options and a standard option.

The transaction in an index option takes place on cash settlement basis.



Search & Explore : Management Dictionary

Browse the definition and meaning of more terms similar to Index Option. The Management Dictionary covers over 7000 business concepts from 6 categories.

Share this Page on:

Similar Definitions from same Category: