Review: Special Options Used By Traders
Rating: 5 out of 5
Date: 04 15, 2014
In this book, Young explains five options used by traders.  Exotic options have special conditions attached to them and are usually traded over the counter.  The unique features of these options adapt to situations that might otherwise require some crafty financial maneuvering. For example, situations requiring an all-or-nothing-style hedge, or where an investor faces exchange-rate and price risk, can be solved with these strategies.• Lookback options allow for trading at expiration by looking back and exercising at the best price.• Barrier options are similar to Vanilla options but are activated & deactivated according to a preset barrier price.• Asian options were introduced in Japan in 1987 in an effort to stop manipulation of asset prices.• For a better method of trading a pair of assets when the investor believes that one will do better than the other, an  Outperformance option could be used.• In a Cliquet option, also known as a Ratchet option, the strike price is reset at pre-determined and regular intervals until it reaches maturity.For me, this was by far the most complicated of Young’s books but it’s an interesting & informative read.  Exotic options are definitely not for novice traders.