Chooser option (exotic option)

A chooser option is a financial instrument. It is an exotic option.

A chooser option is similar to a standardstraddle. With a chooser option, however, the choice is made to indicate at a predetermined time whether the option is a call or put option. That makes a chooser option cheaper than a straddle. The further away the moment of choice lies in the duration of the chooser, the more expensive the option will be in price and will approach the price of a straddle.

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