Options and FuturesVertical Spread Opening Purchase Stop-Limit Order Book Entry Securities Discount Rate Purchasing Hedge or Long Hedge
Capped-Style Option
A capped option, as the name suggests, is an option with a predetermined maximum profit limit. This limit is determined by the option's strike price, along with an additional cap interval for a call option or a reduction in the strike price for a put option. It is worth noting that a capped option is automatically exercised when the underlying security's closing price reaches or exceeds the cap price for a call option, or falls at or below the cap price for a put option.
Related terms
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