What is Atlas Options?
A type of equity-based exotic option from the family of mountain range options. Atlas options have a payout that is based on the performance of the underlying securities, which comprise stocks. At maturity, some of the best- and worst-performing stocks are removed from this group of underlying securities, at which point the payout is calculated on the remainder of the securities. Read more for examples and further explanation including related video clips and also comments
Example explains Atlas Options
Atlas options are typically only traded by sophisticated institutional investors who have the resources and risk tolerance to accept what can be an extremely complex security. As the time to maturity draws nearer, the price or value of an Atlas option may become more readily apparent as the top and bottom performers clearly separate themselves from the rest of the pack. These options were first introduced in the late 1990s, and comprised European-based equities. Most are created as call options, with long terms to maturity.
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