Is Favorable Option Best Option

Is favorable option best option

Is favorable option best option

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Best-Of Option

An option on the best performing asset in a basket of assets during a designated period of time.

The holder receives the gain on the best performing asset among the predefined assets. The holder is long a call on the best performers.

Is favorable option best option

For example, suppose a best-of option is written on a basket of three stocks: A, B, and C. Returns for the three stocks, respectively, are: 12%, 13%, and 16%.

How To Buy Options: Getting Approved for Options

Then, the option would provide its holder with a gain based on the performance of stock C, with respect to the strike price.

It is also called a best-of-two option, an option on the maximum, a multi-asset option, a multifactor option, etc.

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