Exotic Options: Forward Start Options
Interactive

Exotic Options: Forward Start Options

Intuition Publishing
Updated Sep 24, 2020

Forward start options are exotic options that become active at some specified date in the future, but the premium is paid, and time to expiration is fixed, when the option is purchased. We discuss the three main types of forward start option, cliquet/ratchet options, ladder options, and shout options, and give an example of each.