There are eight basic kinds of Asian options: or call ric or arithmetic average e asset price is used in place of underlying price or strike. Basic Kinds of Asian Options Kinds There are eight basic kinds of Asian options: or call ric or arithmetic average.
As with vanilla options, Asian style options are available as both call options and put options. Benefits of the Asian Option. Average value options are generally priced lower than their vanilla counterparts. This is largely because the averaging of value lowers the impact of .
Unfortunately, most Asian options in practice are based on arithmetic averaging, while precise results are The value of an Asian option is less than the value of a portfolio of intermediate options with the same strike price. The value of geometric average call option is (average-price Asian options) or the option strike price (average-strike Asian options). Furthermore the average prices can be calculated using either the arithmetic mean or the geometric mean. The type of Asian options that will be examined throughout this thesis is arithmetic-price Asian options.
Ch Arithmetic Average Options and Asian Opitons I. Asian Options and Their Analytic Pricing Formulas II. Binomial Tree Model to Price Average Options III. Combination of Arithmetic Average and Reset Options Asian options are path dependent derivatives whose payo s depend on the average of the underlying asset prices during the option life.