What is ‘AC-DC Option’
A derivative that gives an investor the right – but not the obligation – to buy (call) or sell (put) a security at a certain price (strike), and in which the investor makes the buy or sell decision at a specific time after the option is in force, rather than at the time of purchase. The AC-DC option is basically an option, which on a future date can become a call or put option at the buyer’s discretion.
Also called a “chooser option” or “hermaphrodite option”.
Explaining ‘AC-DC Option’
The value of an AC-DC option is based on a complex formula that takes all of these variables into account. An AC-DC option is a type of exotic option, meaning it has more complicated terms than traditional, plain-vanilla options.
Further Reading
- An overview of the AC-DC and DC-DC converters for LED lighting applications – www.tandfonline.com [PDF]
- Popular culture as a different type of heritage: The making of AC/DC Lane – www.tandfonline.com [PDF]
- Optimal operation of hybrid AC/DC microgrids under uncertainty of renewable energy resources: A comprehensive review – www.sciencedirect.com [PDF]
- Assessment of technical and financial benefits of AC and DC microgrids based on solar photovoltaic – link.springer.com [PDF]
- Locational marginal pricing based financial transmission right – ieeexplore.ieee.org [PDF]
- Reconfigurable dc links for restructuring existing medium voltage ac distribution grids – www.tandfonline.com [PDF]
- Nonlinear robust control for parallel AC/DC transmission systems: A new adaptive back-stepping approach – www.tandfonline.com [PDF]
- Implementation of LMP-FTR mechanism in an AC-DC system – ieeexplore.ieee.org [PDF]
- AC/DC generators with waveform control: innovation in submerged arc welding – www.tandfonline.com [PDF]
