# Option, compound, often also compound option

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- Post ID: 590499
- Modified: 2023-07-25T21:12:25+00:00
- Language: en

## Definition

Option in which another option forms the underlying. It is therefore an option on an option. - As the writer of such an option, one must reckon with possible high obligations, because a particularly large leverage effect is possible here. - See Credit default swap squared, Derivative, Derivative transactions clearing obligation, Derivative transactions reporting obligation, Novation, Extension fee. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1